South Africa Case Law

ABC Bank Limited v The Commissioner for the South African Revenue Service (VAT 1904)

ABC Bank Limited v The Commissioner for the South African Revenue Service (VAT 1904) [2020] ZATC 25; 83 SATC 454 (26 November 2020)

Court

Tax Court

Case number

VAT 1904

Judges

Sievers, J Hammon-Ungerer, E Gouws

The court found that ABC Bank Limited's provision of loan cover to its clients was not gratuitous but formed part of the overall consideration received for the supply of credit. Although no separate fee was charged for the loan cover, the costs were recovered through initiation and service fees, which included VAT. The supply of loan cover was made in the course and furtherance of ABC's enterprise and was linked to the provision of taxable supplies. The court rejected SARS's argument that the supply was exclusively exempt, holding that the commercial reality was that the fees charged formed p…

Source excerpt

• Value Added Tax
• Input Tax Deduction
• Contract Of Insurance
• Financial Services Exemption

ABC (Pty) Ltd v Commissioner for the South African Revenue Service (1626)

ABC (Pty) Ltd v Commissioner for the South African Revenue Service (1626) [2020] ZATC 9; 82 SATC 388 (3 March 2020)

Court

Tax Court

Case number

VAT 1626

Judge

Maluleke

Tax Court held that foreign exchange commission was taxable consideration, so the appellant could use direct attribution for branch input VAT.

• Vat Input Tax Deduction
• Direct Attribution Method
• Apportionment Method
• Financial Services Exemption
• Commission As Consideration
• Vat-input-tax-deduction

ABC (Pty) Ltd v Commissioner for the South African Revenue Service (VAT 1610)

ABC (Pty) Ltd v Commissioner for the South African Revenue Service (VAT 1610) [2019] ZATC 18 (19 June 2019)

Court

Tax Court

Case number

VAT 1610

Judge

Louw

The court found that the services acquired from local service providers were not sufficiently linked to the making of taxable supplies, but rather related to the refinancing of debt, which is an exempt financial service under the VAT Act. The connection between the services and the taxable supplies was too remote to justify input tax deduction. Similarly, services from foreign providers were not acquired for the purpose of making taxable supplies and thus constituted imported services subject to output VAT. The penalty imposed by SARS was remitted as there was no evidence of intent to avoid o…

Source excerpt

• Input Tax Deduction
• Imported Services
• Vat Penalties
• Financial Services Exemption