South Africa Case Law

Coronation Investment Management SA (Pty) Limited v Commissioner for the South African Revenue Service (CCT 47/23)

Coronation Investment Management SA (Pty) Limited v Commissioner for the South African Revenue Service (CCT 47/23) [2024] ZACC 11; 2024 (9) BCLR 1128 (CC); 2024 (6) SA 310 (CC); 87 SATC 150 (21 June 2024)

Court

Constitutional Court

Case number

CCT 47/23

Judges

Zondo, Bilchitz, Chaskalson, Madlanga, Majiedt, Mathopo, Mhlantla, Theron, Tshiqi

The Constitutional Court held that CGFM's actual business was fund management, not investment management trading, and that its operations in Ireland met the requirements for a foreign business establishment under section 9D of the Income Tax Act. The Court found that CGFM's delegation of investment management trading to licensed third parties was lawful, standard industry practice, and did not undermine its economic substance or FBE status. The Supreme Court of Appeal erred by adopting a theoretical approach to CGFM's business and conflating fund management with investment management trading.…

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• Controlled Foreign Company
• Foreign Business Establishment
• Income Tax Exemption
• Economic Substance
• Outsourcing Of Primary Operations
• Anti Avoidance

XYZ CC v Commissioner for the South African Revenue Service (13285)

XYZ CC v Commissioner for the South African Revenue Service (13285) [2015] ZATC 4 (10 September 2015)

Court

Tax Court

Case number

13285

Judge

M P Tsoka

The court found that the loans advanced by XYZ CC to JK Property CC and LM CC were, in substance, disguised dividend distributions to Mr. B, the sole member of all three close corporations. The court held that close corporations cannot form part of a group of companies for purposes of the Income Tax Act, and thus the exemption provisions relied upon by XYZ CC were inapplicable. The facts indicated that the loans were interest-free, not repaid within the stipulated period, and lacked genuine repayment agreements, amounting to an anti-avoidance scheme. The court distinguished the ABC (Pty) Ltd…

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• Secondary Tax On Companies
• Deemed Dividends
• Connected Persons
• Interest Free Loans
• Anti Avoidance
• Onus Of Proof

DS v Commissioner For SARS (13238 & 13164/2008)

DS v Commissioner For SARS (13238 & 13164/2008) [2014] ZATC 5; 77 SATC 175 (8 December 2014)

Court

Tax Court

Case number

13238 & 13164/2008

Judge

Rogers

The court held that the Commissioner’s satisfaction, as expressed in the assessment letter of 30 November 2010 and the subsequent disallowance letter, was based solely on the first change in shareholding (March 2003) and not on the second change (November 2003). The Commissioner cannot amend his grounds of assessment to rely on matters on which he was not satisfied at the time of issuing the assessment. The jurisdictional fact for the exercise of the Commissioner’s power under s 103(2) is his satisfaction at the time of assessment, and he must stand or fall by those reasons. The application t…

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• Income Tax Act
• Assessed Loss Set Off
• Anti Avoidance
• Amendment Of Pleadings
• Jurisdictional Facts

XYZ Bank Ltd v Commissioner for the South african Revenue Service (10808)

XYZ Bank Ltd v Commissioner for the South african Revenue Service (10808) [2001] ZATC 1 (16 May 2001)

Court

Tax Court

Case number

10808

Judges

F C Kirk-Cohen, RJ Heffer, M C van Blerck

The Tax Court held that SARS could rely on section 103(1) in the alternative to ordinary taxing provisions, and dismissed XYZ Bank’s point in limine.

• Income Tax Assessment
• Anti Avoidance
• Trading Stock Valuation
• Section 103 Application
• Income-tax
• Tax-avoidance