ABD CC v Commissioner for the South African Revenue Service (VAT 969) [2015] ZATC 6 (30 March 2015)

ABD CC v Commissioner for the South African Revenue Service (VAT 969) [2015] ZATC 6 (30 March 2015)

The court found that the Appellant supplied local services directly to the customers of foreign tour operators, who were present in the Republic at the time the services were rendered. The evidence showed that the Appellant contracted with local suppliers, invoiced the foreign tour operators for the full package, and acted as principal in the supply of services. The Appellant's involvement in arranging, supervising, and invoicing for the local services, as well as its financial accounting treatment, demonstrated that it was not merely an agent or intermediary. The contracts and conduct indicated that the Appellant provided the services directly to the end users. Accordingly, the...

Citation
[2015] ZATC 6
Parties
Appellant: ABD CC; Respondent: Commissioner for the South African Revenue Service
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
30 March 2015
Case Number
VAT 969
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeal dismissed.
Judges
Le Grange
Legal Topics
Value Added Tax, Zero Rating, Services Supplied to Non Residents, Destination Principle, Agency Vs Principal, Input Deduction
Tax Law Value Added Tax Zero Rating Services Supplied to Non Residents Destination Principle Agency Vs Principal Input Deduction

Case Brief

Summary, issues, holding and outcome

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Parties

ABD CC

Appellant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether the services supplied by the Appellant to foreign tour operators and their customers qualify for zero-rating under section 11(2)(l) of the Value-Added Tax Act.
  2. 2 Whether the Appellant supplied services directly to persons present in the Republic at the time the services were rendered, thereby excluding zero-rating.
  3. 3 Whether the Appellant acted as an agent or principal in supplying local services to foreign tour operators and their customers.

Ratio Decidendi

The court found that the Appellant supplied local services directly to the customers of foreign tour operators, who were present in the Republic at the time the services were rendered. The evidence showed that the Appellant contracted with local suppliers, invoiced the foreign tour operators for the full package, and acted as principal in the supply of services. The Appellant's involvement in arranging, supervising, and invoicing for the local services, as well as its financial accounting treatment, demonstrated that it was not merely an agent or intermediary. The contracts and conduct indicated that the Appellant provided the services directly to the end users. Accordingly, the...

Court Disposition

Appeal dismissed.

Orders

  • The appeal is dismissed.
  • This ruling applies to all tours relevant to the assessment at issue.