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

City Power (SOC) Limited v Commissioner for the South African Revenue Service (1147/2019)

City Power (SOC) Limited v Commissioner for the South African Revenue Service (1147/2019) [2020] ZASCA 150; 2022 (1) SA 121 (SCA); 83 SATC 523 (20 November 2020)

Court

Supreme Court of Appeal

Case number

1147/2019

Judges

Ponnan, Saldulker, Makgoka, Matojane, Sutherland

City Power is a state-owned company and not a municipality as defined in the Income Tax Act or the Constitution. The statutory definition of 'municipality' is confined to organs of state exercising legislative and executive authority within a demarcated area, which City Power does not satisfy. The legislative history and explanatory memoranda confirm that only municipalities, not municipal entities or companies owned by municipalities, are exempt from normal tax under section 10(1)(a) and (b). City Power's independent board, commercial operations, and ability to generate profit further distin…

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• Income Tax Exemption
• Municipal Entities
• Interpretation Of Statutes
• Constitutional Spheres Of Government

ABC Limited v Commissioner for the South African Revenue Service (IT14255)

ABC Limited v Commissioner for the South African Revenue Service (IT14255) [2019] ZATC 11 (9 July 2019)

Court

Tax Court

Case number

IT 14255

Judge

Victor

The court held that ABC Limited, although wholly owned by the City and established to provide electricity distribution services, is a private company incorporated under the Companies Act and subject to the Municipal Finance Management Act. The statutory and constitutional framework distinguishes between municipalities, which are exempt from income tax, and municipal entities such as ABC, which are not. The explanatory memoranda and legislative amendments clarify that only municipalities are exempt, and municipal entities are fully taxable. The business and financial arrangements of ABC, inclu…

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• Income Tax Exemption
• Municipal Entities
• Interpretation Of Statutes
• State Owned Enterprises

ABC Company v Commissioner of the South African Revenue Services (14106)

ABC Company v Commissioner of the South African Revenue Services (14106) [2019] ZATC 7; 81 SATC 323 (31 January 2019)

Court

Tax Court

Case number

14106

Judge

L. Windell

The court held that ABC Company does not qualify for approval as a public benefit organisation under section 30(3) of the Income Tax Act. The principal object in ABC's Memorandum of Incorporation refers to providing accommodation to 'low to medium income households', which is a relative and imprecise term and does not equate to the fixed income threshold of R15 000 required by paragraph 3(a) of the Ninth Schedule. The court found that accreditation as a social housing institution under the Social Housing Act does not automatically entitle an entity to PBO status, as the statutory power to app…

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• Public Benefit Organisation Status
• Income Tax Exemption
• Social Housing Act
• Interpretation Of Statutes
• Memorandum Of Incorporation
• Constitutional Right To Housing

S Company v Commissioner for the South African Revenue Service (IT0122/2017)

S Company v Commissioner for the South African Revenue Service (IT0122/2017) [2017] ZATC 2; 80 SATC 159 (17 October 2017)

Court

Tax Court

Case number

IT0122/2017

Judge

J I Cloete

The Tax Court dismissed SARS’ condonation application for late filing, rejected its jurisdictional objection, and granted the taxpayer final relief altering the assessments.

• Tax Administration Act
• Income Tax Exemption
• Recoupment Of Allowances
• Default Judgment
• Condonation
• Jurisdiction Of Tax Court

Toyota South Africa Motors (Pty) Ltd v Commissioner for the South African Revenue Service (495/2000)

Toyota South Africa Motors (Pty) Ltd v Commissioner for the South African Revenue Service (495/2000) [2002] ZASCA 27; 2002 (4) SA 281 (SCA); 64 SATC 421 (28 March 2002)

Court

Supreme Court of Appeal

Case number

495/2000

Judges

Howie, Farlam, Mthiyane, Brand, Heher

The court held that rebates under Phase VI were not amounts paid by the State, so the tax exemption claim failed. Leave to appeal and condonation were dismissed.

• Income Tax Exemption
• Rebates And Deductions
• Condonation For Late Filing
• Export Incentive Scheme
• Income-tax-exemption
• Customs-and-excise-rebates

Nissan SA (Pty) Ltd v Commissioner for Inland Revenue (425/96)

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)

Court

Supreme Court of Appeal

Case number

425/96

Judges

Marais, Mahomed, Eksteen, Zulman, Farlam

The Supreme Court of Appeal held that export incentive payments under the Phase VI Scheme were exempt from normal tax, without requiring ministerial approval.

• Income Tax Exemption
• Export Incentive Schemes
• Statutory Interpretation
• Retrospective Legislation
• Income-tax-exemption
• Export-incentive-schemes

Chancellor, Masters and Scholars of the University of Oxford v Commissioner for Inland Revenue (385/94)

Chancellor, Masters and Scholars of the University of Oxford v Commissioner for Inland Revenue (385/94) [1995] ZASCA 157; 1996 (1) SA 1196 (SCA); [1996] 1 All SA 287 (A); (30 November 1995)

Court

Supreme Court of Appeal

Case number

385/94

Judges

Corbett, E M Grosskopf, Nestadt, Van den Heever, Schutz

The court held that the University of Oxford qualifies as an educational institution of a public character, so Oxford University Press South Africa was tax-exempt under section 10(1)(f).

• Income Tax Exemption
• Educational Institution
• Foreign Entity Taxation
• Section 10 1 F Interpretation
• Income-tax-exemption
• Educational-institutions

H Holt Will Trust v Commissioner for Inland Revenue (131/91)

H Holt Will Trust v Commissioner for Inland Revenue (131/91) [1992] ZASCA 135 (10 September 1992)

Court

Supreme Court of Appeal

Case number

131/91

Judges

Corbett, Hefer, Vivier, Van den Heever, Harms

The Supreme Court of Appeal held that the surplus income and capital of the H Holt Will Trust vested in the ultimate charitable beneficiaries upon the death of the testatrix. The annuitant, Miss Walker, was found to have a usufructuary interest, not a fiduciary interest, and her entitlement to annuity and supplementation from capital did not postpone vesting in the charities. The will clearly contemplated a residue for distribution to the charities, and the absence of a condition of survivorship or other contingency meant that the charities acquired a vested right to the trust assets immediat…

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• Income Tax Exemption
• Vesting Of Trust Assets
• Testamentary Trusts
• Charitable Bequests

Commissioner for Inland Revenue v Kuttel (349/90)

Commissioner for Inland Revenue v Kuttel (349/90) [1992] ZASCA 60; 1992 (3) SA 242 (AD); [1992] 2 All SA 151 (A) (31 March 1992)

Court

Supreme Court of Appeal

Case number

349/90

Judges

Corbett, Smalberger, Kumleben, Goldstone, Harms

The court held that the taxpayer was not ordinarily resident in South Africa and could claim the income tax exemptions for interest and dividends.

• Ordinary Residence
• Income Tax Exemption
• Burden Of Proof
• Exchange Control Regulations
• Ordinary-residence
• Income-tax-exemption