Tax Law
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In Cornerstone Logistics (Pty) Ltd and Another v Zacpak Cape Town Depot (Pty) Ltd [2022] 2 All SA 13 (SCA), interpretation of indemnity clause – liability for customs duty, VAT, and other charges on goods initially stored in a warehouse and not exported.
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In Commissioner for the South African Revenue Service v Glencore Operations SA (Pty) Ltd [2021] 4 All SA 14 (SCA) the mining company claimed a refund of fuel levy, appeal hinged on interpretation of ‘own primary production activities in mining’.
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SARS has discovered R400bn in offshore holdings owned by South Africans and is on the rampage to collect all taxes that it is owed on these assets. This means that South Africans who are currently working abroad need to particularly take note and ensure that they are compliant with all of SARS’ tax requirements.
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SARS’ recruitment drive has provided some insight into the state of affairs at the organisation. With applications now closed, SARS released the details around the roughly 88,000 applications it received, and the numbers paint an unsettling picture.
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The full bench of the Western Cape High court recently delivered judgment in a favour of a taxpayer (Cloete J dissenting) who, according to the Tax Court, was simply abusing process. Indeed, when studying the judgment of the Tax Court, it is difficult to see how the taxpayer’s approach was nothing more than an abuse of process which in turn begs the question – why was the taxpayer successful on appeal to the full bench of the High Court?
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With a new financial emigration regime at play from 1 March 2021, South Africans wanting to emigrate financially will need to prepare themselves for a tougher and more complex process in proving non-resident status with SARS.
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Two cases exhibit the extent of SARS’ powers, albeit from opposing perspectives. The first demonstrates the big role SARS can play in both recovering the proceeds of state capture and in bringing the looters to book, while the second shows how devastating SARS’ powers can be when not exercised within the legislative framework.
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Withholding tax: Allen West discusses the so-called physical presence test and an ordinary resident definition and as defined in terms of South African common law for purposes of Section 35A of the Income Tax Act.
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Allen West looks at the registerability and effect of a condition inserted into a deed of transfer which excludes community of property, whether such a condition lawful and binding, and the effect it has on creditors.
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Purveyors South Africa Mine Services (Pty) Ltd v CSARS: Import VAT- does mere knowledge of a default by SARS render a subsequent voluntary disclosure programme application under section 227(a) of the Tax Administration Act involuntary? Legislative compliance and timing are vital.
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SARS is expected to exercise its considerable power to collect the correct amount of taxes to the benefit of the fiscus. However, this does not mean that rogue officials can act outside the law and appoint banks as collection agents, as they see fit.
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Taxpayers needing to work from home have been asking whether they may claim a deduction from their taxes for expenses they incur in doing so. The good news for some is that it is possible to claim a deduction where one meets the criteria for this; however, the permutations in the context of employees are quite limiting and dependent on careful consideration and planning.
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The Supreme Court of Appeal confirms that 15% VAT is chargeable on cross-border goods and services. For vendors flouting the provisions of the Value-Added Tax Act, 1991 in attempt for their supplies to be (incorrectly) zero-rated, the consequences could be disastrous; a lesson which a vendor learned when it approached the Supreme Court of Appeal (“the SCA”) in Diageo South Africa (Pty) Ltd v Commissioner for the South African Revenue Service (330/2019) [2020] ZASCA 34 (“Diageo”).
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COVID-19 – Companies placed in liquidation: Court leaves SARS weak, but retrenched employees are the real victims
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In the recent case of CSARS v Clicks Retailers (Pty) Ltd (58/2019) [2019] ZASCA 187, the Supreme Court of Appeal (“the SCA”) sided with SARS in its interpretation of section 24C of the Income Tax Act, No. 58 of 1962. Contractors and others who avail themselves to this provision should heed the permutations set by this judgment, which was delivered on 3 December 2019.
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The spirited Budget Speech given by Minister Tito Mboweni this Wednesday may have given many taxpayers a sense of cold comfort in otherwise tumultuous economic conditions in South Africa. However, aside from the quips about pot plants and there being no VAT increase, the proposals made are simply not enough for taxpayers anymore.
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Many taxpayers will breathe a sigh of relief following Finance Minister, Tito Mboweni’s, 2020 Budget Speech. Many pundits predicted that the Minister’s hands were tied and he would have no choice but to increase the VAT rate or at least tax rates across the board. Instead, the Minister afforded some relief to taxpayers with an above-inflation increase in the personal income tax brackets and rebates.
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Where a foreign expatriate takes up employment in South Africa, the resultant tax consequences can be very complex and demand a deeper understanding of South African and international tax.
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With the effective date of 01 March 2020 for the ‘expat tax’ drawing closer, South African expatriates, their employers and tax advisors have little time to come to grips with the impact that this tax policy and law change will have on them personally.
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The husband signed a deed of donation giving his half share of their property to his wife, on the advice of his auditor, to get a tax break for his business.