South Africa Case Law

Commissioner for the South African Revenue Service v Digicall Solutions (Pty) Ltd (927/2017)

Commissioner for the South African Revenue Service v Digicall Solutions (Pty) Ltd (927/2017) [2018] ZASCA 137; [2018] 4 All SA 647 (SCA); 2019 (4) SA 312 (SCA); 81 SATC 97 (28 September 2018)

Court

Supreme Court of Appeal

Case number

927/2017

Judges

Navsa, Majiedt, Swain, Zondi, Mokgohloa

The Supreme Court of Appeal found that the first change in shareholding in the taxpayer company was effected solely or mainly for the purpose of utilising the assessed loss to avoid tax liability. The evidence demonstrated that the assessed loss was a central consideration in the structuring of the transactions, and that the taxpayer failed to discharge the onus of proving that the change was not effected for the prohibited purpose. The Court held that the income received by the taxpayer after the second change in shareholding resulted indirectly from the first change, as the transactions wer…

Source excerpt

• Income Tax Act Section 103
• Assessed Loss Utilisation
• Change In Shareholding
• Tax Avoidance
• Onus Of Proof
• Corporate Structuring

Commissioner for Inland Revenue v Ocean Manufacturing Ltd. (483/88)

Commissioner for Inland Revenue v Ocean Manufacturing Ltd. (483/88) [1990] ZASCA 66; 1990 (3) SA 610 (AD); [1990] 2 All SA 422 (A) (1 June 1990)

Court

Supreme Court of Appeal

Case number

483/88

Judges

Corbett, Botha, Smalberger, Nicholas, Smuts

The court held that a separate transfer agreement, not the broader merger arrangement, was the relevant agreement for section 103(2) and allowed the Commissioner’s appeal.

• Assessed Loss Utilisation
• Tax Avoidance
• Income Tax Act Section 103 2
• Merger Agreement
• Transfer Agreement
• Tax-avoidance