Below, please find issue 52 of ENSafrica's tax in brief, a snapshot of the latest tax developments in South Africa.

case law

  • High Court of South Africa (Western Cape Division, Cape Town) | CSARS and Joint Liquidators of Greenbridge Group (Pty) Ltd (in Provisional Liquidation) v Van Zyl (16604/2019) 
  • There are two applications concerned:
    • an interlocutory application for discovery in terms of Rule 35 of the Uniform Rules of Court; and
    • a return day to confirm an interim order of sequestration against the Respondent, Mr Van Zyl who had been placed on provisional sequestration on 2 July 2020.
  • The respondent, prior to the extended rule nisi had filed an application requesting, inter alia, that:
    • the rules of discovery as they relate to actions is declared mutatis mutandis applicable to the application in terms of Rule 35(13);
    • the Intervening Applicant be ordered to comply therewith in terms of the rules relating to discovery; and
    • the main application be postponed and the provisional order extended pending the return of the documents requested by the Respondent from the Intervening Applicant
  • The court considered, inter alia:
    • Rule 35(13) of the Uniform Rules of Court.
    • whether exceptional circumstances existed or whether the respondent's interlocutory application was a delaying mechanism
  • The court found that the interlocutory application was purely a mechanism to delay the matter as no exceptional circumstances existed for the court to exercise its discretion in favour of the respondent.
  • Find a copy of this judgment here.

legislation and draft legislation

  • On 7 October 2020, the National Treasury and the South African Revenue Service ("SARS") presented to the Standing Committee of Finance (the "SCoF"), a draft response to public submissions made on, inter alia, the 2020 Draft Taxation Laws Amendment Bill ("Draft TLAB") and the 2020 Draft Tax Administration Laws Amendment Bill ("Draft TALAB") which were published on 31 July 2020.
  • The key issues raised during the public consultation process and during the SCoF public hearings were the following:
  • 2020 Draft Rates Bill
    • Increase on excise duty on tobacco
  • 2020 Draft TLAB
    • Introduction of export taxes on scrap metals
    • Employment, Individuals and Savings
    • Addressing an anomaly in the tax exemption of employer provided bursaries
    • Withdrawing from retirement funds upon emigration
    • Amending the 183 day rule to the foreign remuneration exemption, in light of 2020 travel restrictions
    • Business Tax (General)
    • Clarifying the rollover relief for unbundling transactions
    • Business Tax (Incentives)
    • Addressing the tax treatments of allowable mining capital expenditure
    • Changing the Minister of Finance discretion in lifting ringfencing of capital expenditure per mine
  • 2020 Draft TALAB
    • Tax Administration Act, 2011 (the "TAA")
    • Raising of assessments based on an estimate
    • Grace period to determine if a payment in excess of an assessment was erroneous
    • Provision that a refund need not be authorised where a matter is under criminal investigation
  • Income Tax Act, 1962 (the "Act"), the Value Added Tax Act, 1991 (the "VAT Act") and the TAA
    • The removal of the requirement to prove intent from certain statutory tax offences.
  • A copy of the draft response has not been published on the National Treasury website as yet however, feel free to contact us should you be interested.

Please click here to read the full article.

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.