- Supreme Court of Appeal |
Consol Glass (Pty) Ltd v Commissioner for the South African Revenue
- Consol Glass (Pty) Ltd ("Consol") (the then shell company) acquired the business of the listed company Consol Limited in 2007. The acquisition formed part of a leveraged buy-out or debt pushdown by securing debt funding in the form of Eurobonds. In 2012, Consol entered into a refinancing transaction as regards the original debt and hedging positions (as it was cheaper to swap foreign funding for local funding). In doing so, it procured the services of both local service providers and foreign service providers.
- Consol claimed an input tax deduction for the value-added tax ("VAT") charged by the local service providers and did not pay VAT on imported services in respect of services rendered by foreign service providers.
- The question before the SCA was whether Consol was entitled to claim the input tax deductions and whether Consol was liable for VAT on imported services on the foreign transaction fees.
- The SCA considered the following:
- whether Consol issued the acquired financial services a debt security that transformed Consol to a vendor supplying financial services as well as the manufacture and sale of glass containers (the latter being the enterprise that it carried on for VAT purposes).
- the "closeness of connection" between the services acquired and the making of taxable supplies.
- By considering the purpose (and effect) of the original transaction, the SCA found that Consol was not entitled to claim the input VAT and was required to pay VAT on imported services on foreign transaction fees.
- The effect of this judgment is discussed in our article published in ENSight.
- Find a copy of this judgment here.
- Please see an ENSight article here.
legislation and draft legislation
- Amendment Acts | promulgated on 20 January 2021:
- Explanatory Memorandum on the
Taxation Laws Amendment Bill, 2020
- Find a copy of the Explanatory Memorandum here.
- Memorandum on the Objects of
the Tax Administration Laws Amendment Bill, 2020
- Find a copy of the Memorandum here.
- Final Response Document on
- 2020 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill;
- 2020 Draft Taxation Laws Amendment Bill; and
- 2020 Draft Tax Administration Laws Amendment Bill.
- find a copy of the Final Response Document here.
- Presentation to the Standing
Committee on Finance (SCoF) | Final Response Document on the 2020
Draft Rates and Monetary Amounts and Amendment of Revenue Laws
Bill, 2020 Draft Taxation Laws Amendment Bill, 2020 Draft Tax
Administration Laws Amendment Bill - 20 January 2021
- Find a copy of the Presentation to the SCoF here.
- Media statement | publication
of the 2020 Tax Acts and accompanying documentation
- Find a copy of the media statement here.
- Value-Added Tax Act, 1991
("VAT Act") | general notice in Government
- The International Administration Commission of South Africa is issuing a certificate to the South African Revenue Service ("SARS") in terms of Schedule 1, paragraph 8 of the VAT Act, rebate item 412.11/00.00.01.00, for the importation of vaccines classifiable under tariff heading 3002.20 for the use of vaccination of persons against the SARS-CoV-2 for the treatment of the Coronavirus disease.
- Find a copy of the general notice here.
- Tax Administration Act, 2011
("TAA") | Public Notice 58 in Government Gazette
- Published in terms of section 25(7) of the TAA for extension of submission of the SARS eFiling platform of income tax returns relating to provisional taxpayers for the 2020 tax year to 15 February 2021.
- Find a copy of the notice here.
Please click here to read the full report.
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