Judgment was delivered by the Tax Court in the matter between ABC (Pty) Ltd v Commissioner for SARS (case number 13238/2008, as yet unreported) on 8 December 2014. The matter concerned, among other things, an application by the South African Revenue Service (SARS) to amend its statement of grounds of assessment. Rule 13 of the previous rules of the Tax Court and rule 35 of the new rules allow parties to amend their pleadings on application. The question is, however, to what extent the court will allow for such amendments.
Category: Court Cases
Interpretation of exemption provisions
The Tax Court gave judgment in the matter of ABC (Pty) Ltd vCommissioner for the South African Revenue Service (case number 13512, as yet unreported) on 30 March 2015. Even though the case concerned secondary tax on companies (STC), which has been replaced by dividends tax, it is interesting to see how the court dealt with the interpretation of an exemption provision.
VAT treatment of supplies to non-residents
On 30 March 2015 the tax court delivered judgment in the matter of ABD CC v Commissioner for the South African Revenue Service. The matter concerned the Value-Added Tax (VAT) treatment of the supply of goods and services to non-residents in circumstances where such goods and services are physically supplied to and consumed by a person within South Africa. The vendor had certain agreements in place with foreign tour operators in terms of which the vendor would arrange tours in South Africa. The foreign tour operators, in turn, sold tour packages to their customers, who were foreign tourists wishing to visit South Africa.
A preservation order is not of itself a ‘tax collection’ measure
A preservation order is not of itself a ‘tax collection’ measure – but it may well be followed by tax collection processes On 1 December 2014 the Pretoria High Court confirmed a provisional preservation order that had been granted in terms of section 163 of the Tax Administration Act 28 of 2011 against Africa Cash and Carry (Pty) Ltd and various members of the Hathurani family in their personal capacities and in their representative capacities as trustees of trusts. (The judgment – thus far published only on the SARS website – is reported as Commissioner for the South African Revenue Services, as applicant, and 19 respondents, including trustees of the Edrees Hathurani Family Trust; case 49274/2014.)
Challenge to SARS under the Promotion of Administrative Justice Act
Author: PwC South Africa In this issue we have focused on the SARS tactic of challenging the forum to which a taxpayer brings a dispute with SARS. These challenges illustrate that the selection of the procedure to be followed in a dispute with SARS may be critical to success. In the matter of Ackermans Ltd v Commissioner for the South African Revenue Service Case No 16408/2013 in the North Gauteng High Court, the taxpayer had elected to bring an application for a review of the actions of SARS as unconstitutional in terms of section 6 of PAJA. It should be mentioned that the taxpayer had also, on the merits of the dispute, noted an objection and appealed to the Tax Court against the disallowance of that objection.
When may SARS challenge the jurisdiction of the Tax Court?
Our tax cases contain a few instances in which SARS, or its predecessor, Inland Revenue, has sought to avert an anticipated unfavourable judgment by challenging the procedure under which the dispute has been raised. The most recent attempt was in the matter of ABC (Pty) Ltd v Commissioner for the South African Revenue Service [2015] ZAWCHC 8 (judgment delivered on 6 February 2015) (‘the ABC Case’). The recent challenge is perplexing, as SARS had readily entertained an objection against the assessments in question and had contested the appeal in the Tax Court, and had not at any stage of those proceedings suggested that the decision in question was not subject to objection and appeal.
Rethinking retirement – when must employees retire?
The question often arises as to when employees should retire and when employers can compel such employees to retire. There is no statutory retirement age applicable to all employees. The retirement age should be agreed between the parties. Where there is no agreed retirement age, an employer may retire an employee who has reached the retirement age that is the norm. Parties normally agree in the employment contract on a retirement ages or often agree that the retirement age will be as per a company policy or the rules or a retirement fund.
What’s good for the goose…
In the recent judgement by a full bench of the Western Cape High Court, in the matter of ABC (Pty) Ltd v the Commissioner for the South African Revenue Service (6 February 2015), the South African Revenue Service (SARS) was reminded that, what’s good for the goose, is good for the gander. The taxpayer, being a vendor for purposes of value-added tax (VAT), staged annual international jazz festivals in Cape Town. In the course of that enterprise it concluded sponsorship agreements with South African Airways, the City of Cape Town, the SABC and Telkom (Sponsors).
Corruption trial of former SARS official delayed
Author: Natasha Marrian (BDlive) The fraud and corruption case against former South African Revenue Service (SARS) official Mandisa Mokwena has again been shifted, this time to October 5. The case dates back to 2011. Ms Mokwena’s attorney, Johann Schafer, said on Monday that the National Prosecuting Authority (NPA) had asked for more time to decide whether to proceed with a corruption case against her. This was after she had made representations to the national director of public prosecutions on why the charges should be dropped.
High Court overrules tax court on input VAT claim on sponsorships
Author: Prof Peter Surtees (Norton Rose Fulbright South Africa) If a taxpayer receives money, goods and services from sponsors in return for providing branding and marketing services to the sponsors, output VAT is payable on the value of these receipts. And if the sponsors decline to furnish tax invoices for the money, goods and services they receive from the taxpayer in return, may the taxpayer infer an input claim from available evidence? The tax court ruled that, when output VAT was due on the value of the receipts; the taxpayer could claim no input credits in the absence of tax invoices. On 6 February 2015 in ABC (Pty) Ltd v CSARS Case No A 129/2014 the High Court of the Western Cape overruled the tax court’s decision.