Below, please find issue 57 of ENSafrica's tax in brief, a snapshot of the latest tax developments in South Africa.

case law

  • High Court (Gauteng Division, Pretoria) | PriceWaterhouseCoopers Inc and Another v Minister of Finance and Another (2 February 2021)
    • PricewaterhouseCoopers Inc. ("PwC") levied with interest in respect of late Value-Added Tax ("VAT") payments.
    • Constitutional law challenge brought by PwC and PwC Partnership in respect of section 39(7) of the Value-Added Tax Act, 1991 which regulates the remittal of interest on late VAT payments but does not provide for the remittal of interest where, having regard to the output tax and input tax relating to the supply in respect of which interest is payable, the failure to make payment within the prescribed period did not result in any financial loss (including any loss of interest) to the fiscus and/or the State.
    • Held that section 39(7) of the VAT Act is not irrational and does not offend the principle of legality, on the basis that the right to seek a remittal is excluded if the failure to pay VAT timeously is within the control of the taxpayer.
    • Held that an obligation to pay tax, or interest thereupon, does not constitute deprivation of property as contemplated in section 25(1) of the Constitution.
    • On the basis that the dispute, although commercial, raised a constitutional matter, the court declined to make an order as to costs.
    • Find a copy of the judgment here.

SARS publications

  • Estates
    • SARS added a new subheading to the webpage, Estates, Update of the Estate's Representative Taxpayer details
    • The purpose of this reference guide is to provide certainty to taxpayers on the VAT treatment of FDFPs implemented by an implementing agency.
    • Find a link to the updated webpage here.
  • Foreign Employment Income Exemption
    • SARS added a new subheading to the webpage, Foreign Employment Income Exemption, Temporary relief in respect of the 2020 and 2021 years of assessment
    • Find a link to the updated webpage here.
  • Tax Directives
    • Update on trade testing: SARS is in the process of enhancing the Tax Directives process and trade testing for Independent Software Vendor (ISV) submissions. To prepare for the implementation of these enhancements, trade testing will start on 22 March 2021 until 22 April 2021, in line with their intention to go-live within the first quarter of the 2021/22 financial year.
    • More detail regarding the submission of test files can be found here.
  • Interpretation note 47 (issue 5) | wear-and-tear or depreciation allowance | issue 4 replaced
    • this note deals with the wear-and-tear or depreciation allowance under section 11(e) of the Income Tax Act, 1962 and provides guidance on the circumstances under which the allowance may be claimed as a deduction.
    • find the new interpretation note here.
  • new binding general ruling ("BGR") 7 (issue 4) | wear-and-tear or depreciation allowance | issue 3 replaced
    • this BGR reproduces the parts of Interpretation Note 47 (issue 5) "Wear-andTear or Depreciation Allowance" that comprise a BGR under section 89 of the Tax Administration Act, 2011.
    • find the new BGR here.

exchange control

  • exchange control circular no. 03/2021
    • Authorised Dealers are advised that the name "Link Investor Services (Pty) Ltd" has been deleted and replaced with "JSE Investor Services CSDP (Pty) Ltd" in section G.(A)(iii)(l) of the Currency and Exchanges Manual for Authorised Dealers.
    • The Manual has been updated accordingly.
    • find a copy of the circular here.

To view the full article, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.