XO Africa Safaris v CSARS (395/15) [2016] ZASCA 160; 79 SATC 1 (3 October 2016)

XO Africa Safaris v CSARS (395/15) [2016] ZASCA 160; 79 SATC 1 (3 October 2016)

The court held that XO Africa Safaris supplied local services—such as accommodation, meals, entertainment, and transport—to foreign tour operators and their customers, who were present in South Africa at the time the services were rendered. The contractual arrangements and evidence demonstrated that XO undertook to provide these services, not merely to organise them. The benefit of the services was enjoyed in the Republic, and XO was the supplier for VAT purposes. Section 11(2)(l) excludes zero rating where services are supplied directly to persons present in South Africa at the time of supply. The statutory purpose is to ensure VAT is levied on services consumed in South Africa....

Citation
[2016] ZASCA 160
Parties
Appellant: XO Africa Safaris CC; Respondent: The Commissioner for the South African Revenue Service
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
3 October 2016
Case Number
395/15
Procedural Posture
Civil Appeal / Appeal From the Tax Court, Johannesburg
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Navsa, Wallis, Saldulker, Mathopo, Dlodlo
Legal Topics
Value Added Tax, Zero Rating, Supply of Services, Statutory Interpretation
Tax Law Commercial and Corporate Value Added Tax Zero Rating Supply of Services Statutory Interpretation

Case Brief

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Parties

XO Africa Safaris CC

Appellant

The Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Civil Appeal / Appeal From the Tax Court, Johannesburg

Legal Issues

  1. 1 Whether XO Africa Safaris' supply of services to foreign tour operators is subject to VAT at the standard rate or qualifies for zero rating under section 11(2)(l) of the Value Added Tax Act 89 of 1991.
  2. 2 Whether the services were supplied directly to persons present in the Republic at the time of supply, thereby excluding zero rating.
  3. 3 Whether SARS was entitled to assess VAT at the standard rate on XO's supply of tour packages.

Ratio Decidendi

The court held that XO Africa Safaris supplied local services—such as accommodation, meals, entertainment, and transport—to foreign tour operators and their customers, who were present in South Africa at the time the services were rendered. The contractual arrangements and evidence demonstrated that XO undertook to provide these services, not merely to organise them. The benefit of the services was enjoyed in the Republic, and XO was the supplier for VAT purposes. Section 11(2)(l) excludes zero rating where services are supplied directly to persons present in South Africa at the time of supply. The statutory purpose is to ensure VAT is levied on services consumed in South Africa....

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.