Below, please find issue 105 of ENSafrica's tax in brief, a snapshot of the latest tax developments in South Africa.

case law

  • High Court of South Africa, Gauteng Division, Pretoria | Glencore Operations SA (Pty) Ltd and Others v CSARS and Another (15988/2020)
    • This application concerns the eligibility of diesel refunds claimed by the Goedgevonden Joint Venture ("JV") in terms of section 75(1A) of the Catoms and Excise Act, 1964, read with item 670.04 of Part 3 of Schedule No. 6.
    • This is a statutory appeal in terms of section 47(9)(e) of the Customs and Excise Act against a determination made by the Commissioner, confirmed on appeal by the latter's National Appeal Committee. The applicants also seek relief based on the Promotion of Administrative Justice Act, 2000 ("PAJA"). In this regard, it is contended that the provisions of PAJA have not been ousted by section 47 of the Customs and Excise Act.
    • On the merits, three issues arose, namely whether:
      • the JV was entitled to rely on a mining authorisation issued to only one of the JV partners;
      • the Commissioner had discretion and failed to exercise that discretion; and
      • the JV's rebate claim should succeed.
    • In respect of each of these issues, the High Court held that:
      • The JV cannot rely a mining authorisation issued to only one of the JV partners, as the formalities of written consent and registration are required and were not complied with;
      • The exercise of discretion is dependent on good cause shown, but the JV was unable to justify its actions; and
      • Accordingly, the rebate claim should fail.
    • The High Court dismissed the appeal with costs, including the costs of two counsel.
    • Find a copy of the case here.
  • High Court of South Africa, KwaZulu Natal Local Division, Durban | NCP Alcohols (Pty) Ltd (D7515/2020)
    • On 30 August 2017, the Commissioner for the South African Revenue Services ("respondent") took a decision to impose customs duty, interest, VAT and penalties on two consignments that were imported by NPC Alcohols (Pty) Ltd ("applicant") on 30 October to 3 November, and 12 December 2014, for purposes of export to its customers in Zambia.
    • The applicant approached the court to review and set aside this decision, as well as to condone the applicant's non-compliance with the time limit in section 7 of PAJA to the extent necessary and to extend the time limit to the date on which the application was delivered.
    • The central questions considered by the High Court were whether:
      • the respondent was entitled to impose customs duties, VAT, interest on VAT and penalties against the applicant when it exercised the administrative powers in terms of section 18A of the Customs and Excise Act on the two consignments that were processed from 31 October to 3 November and on 12 December 2014.
      • the respondent was barred from imposing the customs duties, tax and VAT and VAT penalty due to the lapse of the two-year period and as provided for in section 18A(2)(c) of the Customs and Excise Act.
      • the conduct of the respondent in the decision to impose duty, the rejected internal appeal and the ADR were invalid and reviewable for such were allegedly in violation of certain provisions of section 6 of PAJA.
    • The High Court granted condonation of the non-compliance with section 7 of PAJA and dismissed the appeal with costs, including the cost of counsel.
    • Find a copy of the case here.
  • High Court of South Africa (Gauteng Division, Pretoria) | Trustees of the CC Share Trust and Others v Commissioner for the South African Revenue Service (38211/21) 24 July 2023
    • Two disputes between the taxpayers and the South African Revenue Service ("SARS") came before the court, namely: whether SARS followed the correct process prior to levelling the assessments; and whether the taxpayers were required to exhaust their internal remedies before approaching this court. The applicants requested the SARS assessments to be set aside on the grounds that they were made unlawfully for want of compliance by SARS with its own statutes, specifically section 80J of the Income Tax Act, 1962 ("ITA") dealing with GAAR and section 42(2)(b) of the Tax Administration Act, 2011 ("TAA").
    • Additionally, the taxpayers contended that they were denied audi alteram partem as a result of SARS' non-compliance.
    • SARS contended that (i) the taxpayers had not made a case for the matter to be heard in the High Court in terms of section 105 of the TAA, and (ii) the taxpayers had not made out a case for why they had not exhausted their internal remedies in terms of the TAA, and thus did not comply with section 7(2) of PAJA.
    • On deciding the matter, the court held the following:
      • The law was settled in the Rappa case: the default rule is that disputes are to be heard in the tax court which is more equipped to deal with these issues. An applicant must make out a case for exceptional circumstances and the mere fact that the case raises a question of law does not suffice to constitute an exceptional circumstance.
      • All the issues raised by the taxpayers can be decided in terms of the provisions of the TAA. First the objection process and then failing that, the right to appeal.
      • The taxpayers are not prejudiced from having to go through an appeal if they might succeed on their review point insofar as the rules of the Tax Court allow a party to argue a point of law before the appeal is decided.
      • Although burdensome, the "pay now argue later principle" is not relevant to whether the court should exercise its jurisdiction in terms of section 105. That is the fate of all taxpayers who dispute a SARS assessment; it is not a basis for exceptional circumstances.
    • The application was dismissed with costs.
    • Find a copy of the judgment here.
  • The Supreme Court of Appeal ("SCA") | PFC Properties (Pty) Ltd v Commissioner for the South African Revenue Services and Others (Case no 543/21) Brita De Robillard NO and Another v PFC properties (Pty) Ltd and Others (Case No 409/22)
    • Two related matters came before the SCA. The first concerned an appeal against a winding-up order granted against the appellant, PFC Properties (Pty) Ltd ("PFC"), in favour of SARS. The second concerned an application by the trustees of the De Robillard Family Trust ("DRFT trustees") to place PFC into business rescue after a winding-up application was launched.
    • The SCA held that the relevant business rescue application could not suspend the liquidation application as the former was tainted by abuse. Both applications were therefore dismissed with costs.
    • Find a copy of the judgment here.
  • Tax Court (Pretoria) | The Tall v Commissioner for the South African Revenue Services SARSTC IT 24870; IT 25162; IT 25166
    • The taxpayer brought an application in terms of section 117(3) of the TAA, read with rule 51(2) of the Rules, for inter alia permission to rely on its grounds of appeal in respect of its 2013 to 2016 years of assessment in relation to its 2012 year of assessment.
    • Initially, the applicant raised a prescription objection and an objection against penalties levied in respect of its 2012 year of assessment by SARS, both of which were disallowed.
    • The court dismissed the application with costs for, inter alia, the following reasons:
      • In terms of rule 10(3) read with rule 32(3), a taxpayer may not appeal a new ground against a part or amount not initially objected to, and the applicant did not object to the capital amount in the 2012 year of assessment;
      • the relief sought by the applicant is precluded by section 100 of the TAA as the assessment has become final.
    • Find a copy of the judgment here.

SARS publications

  • e@syFile | release notes
    • e@syFile versions 7.3.7, 7.3.8 and 7.3.9 were released.
    • Find more information here.
  • Multilateral Instrument | Synthesised Texts
    • The Synthesised Texts for the following jurisdictions have been published:
      • Cameroon
      • Hong Kong
      • Romania
      • Pakistan
      • Malaysia
      • New Zealand
    • Find copies of the Synthesised Texts here.
  • System enhancements for the administration and interpretation of the Southern African Customs Union ("SACU") and Mozambique ("SACUM") and the United Kingdom ("UK") (SACUM-UK") Economic Partnership Agreement ("EPA")
    • Until 31 December 2020, goods exported from SACU member states and from Mozambique to the UK were covered by the Southern African Development Community-European Union Economic Partnership Agreement (the SADC-EU EPA).
    • As from 1 January 2021 such goods were traded under the SACUM-UK EPA. The SACUM-UK EPA was negotiated and concluded while the UK was a member of the European Union.
    • Find more information here.
  • SARS published the External Guide on Payment Rules
    • Find the guide here.
  • SARS published a new version of the Transfer Duty Guide (issue 6)
    • Find the guide here.
  • Newsletters | latest Tax Practitioner Connect and Government Connect Newsletters have become available
    • Find more information on the latest Tax Practitioners Connect Issue here.
    • Find more information on the latest Government Connect Issue here.

customs and excise

  • Customs and Excise Act, 1964 | Tariff Amendments 2023
    • The tariff amendment notices scheduled for publication in the Government Gazette relate to the amendments to:
      • Part 3 of Schedule No. 2, by the substitution of safeguard items 260.03/7318.15.41/01.08; 260.03/7318.15.42/01.08 and 260.03/7318.16.30/01.08, to extend the safeguard duties with a rate of 48,04% on threaded fasteners of iron or steel (excluding those of stainless steel and those identifiable for aircraft) – ITAC Report 715 (24 July 2023 up to and including 23 July 2024);
      • Part 3 of Schedule No. 2, by the substitution of safeguard items 260.03/7318.15.41/01.08; 260.03/7318.15.42/01.08 and 260.03/7318.16.30/01.08, to amend the safeguard duties to a rate of 46,04% on threaded fasteners of iron or steel (excluding those of stainless steel and those identifiable for aircraft) – ITAC Report 715 (24 July 2024 up to and including 23 July 2025); and
      • Part 3 of Schedule No. 2, by the substitution of safeguard items 260.03/7318.15.41/01.08; 260.03/7318.15.42/01.08 and 260.03/7318.16.30/01.08, to amend the safeguard duties to a rate of 44,04% on threaded fasteners of iron or steel (excluding those of stainless steel and those identifiable for aircraft) – ITAC Report 715 (24 July 2025 up to and including 23 July 2026).
    • Publication details will be made available at a later stage.
    • Find more information here.
  • Customs and Excise Act, 1964 | Tariff Amendments 2023
    • SARS published a tariff amendment notice related to the amendments to Part 1 of Schedule 2, by the insertion of anti-dumping items under 207.02 in order to impose anti-dumping duties against the alleged dumping of new pneumatic tyres of rubber of a kind used on motor cars, buses or lorries classifiable in tariff heading 40.11, originating in or imported from the People's Republic of China – ITAC Report 714.
    • Find the notice here.

international

  • OECD | Tax challenges of digitalisation: OECD invites public input on Amount B under Pillar One relating to the simplification of transfer pricing rules
    • As part of the ongoing work of the OECD/G20 Inclusive Framework on BEPS to implement the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy and following the agreed Outcome Statement, the OECD is seeking public comments on Amount B under Pillar One.
    • Find more information here.
  • OECD | OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors (India, July 2023)
    • This report sets out the latest developments in international tax reform since February 2023.
    • Find more information here.
  • OECD | OECD reports strong progress to G20 on international tax reforms
    • The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) is making strong progress with ongoing reforms of the international tax system, according to the OECD Secretary-General's latest tax report to G20 Finance Ministers and Central Bank Governors for their meeting in Gandhinagar this week.
    • Find more information here.
  • OECD | OECD and Global Forum support ECOWAS in strengthening the fight against BEPS and improving tax transparency in West Africa
    • The OECD and Global Forum on Transparency and Exchange of Information for Tax Purposes have collaborated with the Economic Community of West African States ("ECOWAS") and the West African Economic and Monetary Union ("UEMOA") commissions in the development of three community legal tax instruments intended to strengthen the fight against base erosion and profit shifting (BEPS) and improve tax transparency in West Africa.
    • Find more information here.
  • OECD | Public comments received on draft toolkits to support developing countries in addressing base erosion and profit shifting risks when pricing minerals
    • Find more information here.

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