Binding Private Ruling 143, dated 2 May 2013, issued in terms of section 76Q of the Income Tax Act No. 58 of 1962 (the Act), deals with whether certain preference shares held by the applicant (a public company incorporated and resident in South Africa) qualify as equity shares in the context of the definition of headquarter company in section 1 of the Act.
Category: Court Cases
Applications For Winding Up Pending Objection Or Appeal
Author: Heinrich Louw (CliffeDekkerHofmeyr) An interesting judgment was handed down in the North Gauteng High Court on 3 October 2013 in the matter of Commissioner for the South African Revenue Service v Miles Plant Hire (Pty) Ltd (case no 23533/2013). Miles Plant Hire (Pty) Ltd (taxpayer) was involved in a dispute with the South African Revenue Service (SARS) in terms of which an appeal was pending.
Commissioner For The South African Revenue Services v Miles Plant Hire (PTY) Ltd Case 23533/2013
The North Gauteng Division of The High Court heard the matter between the Commissioner For The South African Revenue Services (appellant) and Miles Plant Hire (PTY) (respondent) Ltd on 13 September 2013 and delivered its judgement on 3 October 2013. Background to the case These proceedings have their origin in an urgent application filed in April 2013 in which the appellant inter alia sought an order to set aside a resolution adopted by the respondent to file for voluntary business rescue and for the final winding-up of the respondent. On 10 May 2013, the application was postponed on the basis that it would be dealt with on a semi-urgent basis, with the respondent’s agreement to interim anti-dissipation relief.
Shuttleworth V The South African Reserve Bank
Author: Alastair Morphet (CliffeDekkerHofmeyr) Mr Shuttleworth famously sold his shares in Thawte, which earned him a substantial amount of money. He subsequently decided to emigrate from the Republic and to transfer all of his remaining assets out of the country. The South African Reserve Bank imposed a 10% levy on his South African assets as a condition for permission under the Exchange Control Regulations to transfer his assets out of the country. He subsequently approached the North Gauteng High Court to set aside the decision of the Reserve Bank to impose the 10% levy.
‘Unfair’ SARS Penalties To Be Challenged
Author: Amanda Visser (BDlive) Taxpayers can resist the payment of huge understatement penalties levied on tax returns submitted prior to the commencement of the Tax Administration Act (TAA) in October last year, according to tax experts. The practice by the South African Revenue Service (SARS) to levy these penalties — a percentage-based penalty determined with reference to a taxpayer’s behaviour — under the new act on tax returns that were filed and even assessed prior to the effective date of the act is therefore set to be challenged in the tax courts, and even in the high courts.
A New Capital Revenue Tax Decision
Author Peter Surtees (Norton Rose) On 13 June 2013 the Cape tax court delivered judgment on a capital/revenue case, which resulted in a partial victory for both sides. The taxpayer was a company whose sole purpose was to hold a parcel of shares. The question in issue was whether, when the company sold the parcel, the gain was capital or revenue in nature. As was to be expected, in arriving at its decision the court had to determine the intention of the company in holding and then disposing of the shares, and to do this it had to establish the intentions of
Another section 103 Defeat for SARS in the Cape Tax Court
Author: Frank Mosupa (PwC) The judgment of the Western Cape Tax Court in ITC 1862 (2013) 75 SATC 34 concerns the general anti-avoidance provision contained in the now-repealed section 103 of the Income Tax Act 58 of 1962 (the “Income Tax Act”) as applied to the implementation of a particular employee share incentive scheme. The case concerned transactions entered into prior to the coming into force of the new general anti-avoidance rule on 2 November 2006 and now contained in Part IIA of the Income Tax Act.
VAT Invoice: The Importance Of A Compliant Tax Invoice
Author: Nicole Paulsen (CliffeDekkerHofmeyr) South Africa operates a value-added tax (VAT) system whereby the VAT charged by suppliers is subtracted from the VAT charged to customers to calculate the VAT payable or refundable. This system was established to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities.
New Binding Private Ruling: Transfer Of Debtors Book
Author: Heinrich Louw (CliffeDekkerHofmeyr) The South African Revenue Service (SARS) released Binding Private Ruling 154 (ruling) on 3 September 2013. The ruling deals with the transfer of a debtors book as part of a transaction in terms of s45 of the Income Tax Act, No 58 of 1962 (Act) and to what extent a transferee may claim allowances for doubtful debts in terms of s11(j) of the Act.
Appointing new beneficiaries of a trust
ITC 1828 70 SATC 91 is not a new tax case. However, it is an interesting case, which highlights some of the potential tax implications that may be triggered upon the appointment of new beneficiaries to a trust, particularly, a discretionary trust. In ITC 1828 70 SATC 91 a discretionary trust (trust) had been established with the object of benefiting the founder, the founder’s wife and the children, being the discretionary income and capital beneficiaries. The trust had acquired certa