Nissan SA (Pty) Ltd v Commissioner for Inland Revenue (425/96) [1998] ZASCA 59; 1998 (4) SA 860 (SCA); [1998] 4 All SA 269 (A) (2 September 1998)

Nissan SA (Pty) Ltd v Commissioner for Inland Revenue (425/96) [1998] ZASCA 59; 1998 (4) SA 860 (SCA); [1998] 4 All SA 269 (A) (2 September 1998)

The court held that the correct interpretation of section 10(1)(zA) of the Income Tax Act 58 of 1962, as amended in 1991, is that ministerial approval is not required for exemption under the second leg of the provision, which covers amounts paid by the State under any scheme for the promotion or financing of exports. The legislative history and the structure of the provision indicate that the intention was to synthesize previous versions and preserve the tax-exempt status of such payments, avoiding retroactive destruction of vested rights. The Phase VI Scheme qualifies as a scheme for the promotion of exports, and the amounts received by the appellant under this scheme are exempt from...

Citation
[1998] ZASCA 59
Parties
Appellant: Nissan SA (Pty) Ltd; Respondent: Commissioner for Inland Revenue
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
2 September 1998
Case Number
425/96
Procedural Posture
Civil Appeal / Appeal From Special Income Tax Court
Outcome
Appeal upheld. The appellant is entitled to exemption from normal tax on the amounts received under the Phase VI Scheme.
Judges
Marais, Mahomed, Eksteen, Zulman, Farlam
Legal Topics
Income Tax Exemption, Export Incentive Schemes, Statutory Interpretation, Retrospective Legislation
Tax Law Commercial and Corporate Income Tax Exemption Export Incentive Schemes Statutory Interpretation Retrospective Legislation

Case Brief

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Parties

Nissan SA (Pty) Ltd

Appellant

Commissioner for Inland Revenue

Respondent

Procedural Posture

Civil Appeal / Appeal From Special Income Tax Court

Legal Issues

  1. 1 Whether amounts paid by the State under the Phase VI Scheme for export incentives are exempt from normal tax under section 10(1)(zA) of the Income Tax Act 58 of 1962 as amended in 1991.
  2. 2 Whether ministerial approval is required for a scheme to qualify for exemption under the second leg of section 10(1)(zA).
  3. 3 Whether the Phase VI Scheme qualifies as a scheme for the promotion of exports.

Ratio Decidendi

The court held that the correct interpretation of section 10(1)(zA) of the Income Tax Act 58 of 1962, as amended in 1991, is that ministerial approval is not required for exemption under the second leg of the provision, which covers amounts paid by the State under any scheme for the promotion or financing of exports. The legislative history and the structure of the provision indicate that the intention was to synthesize previous versions and preserve the tax-exempt status of such payments, avoiding retroactive destruction of vested rights. The Phase VI Scheme qualifies as a scheme for the promotion of exports, and the amounts received by the appellant under this scheme are exempt from...

Court Disposition

Appeal upheld. The appellant is entitled to exemption from normal tax on the amounts received under the Phase VI Scheme.

Orders

  • The Commissioner is ordered to pay the costs of appeal, excluding any costs occasioned by the engagement of counsel for the appellant.
  • The amounts received by the appellant under the Phase VI Scheme are exempt from normal tax.