South Africa Case Law

Taxpayer Boerdery v Commissioner for the South African Revenue Service (IT 45979)

Taxpayer Boerdery v Commissioner for the South African Revenue Service (IT 45979) [2024] ZATC 5 (20 March 2024)

Court

Tax Court

Case number

IT 45979

Judges

Windell, Prof. P. van der Zwan, Adv. A.K. Sithole

The court found that the so-called 'premiums' paid by Taxpayer Boerdery to Company XYZ were not genuine insurance expenses but rather deposits that created a capital asset in the form of the experience account. The taxpayer retained the right to a refund of the balance, which accrued interest and was accessible on notice. The payments were not permanently outlaid in exchange for insurance cover but were refundable and generated a return, making them of a capital nature. As such, the payments did not qualify for deduction under section 11(a) of the Income Tax Act. The taxpayer failed to discha…

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• Income Tax Deductions
• Capital Vs Revenue Expenditure
• Understatement Penalty
• Insurance Contracts
• Interest On Underpayment

A Taxpayer v Commissioner, South African Revenue Service (IT45638)

A Taxpayer v Commissioner, South African Revenue Service (IT45638) [2023] ZATC 11; 86 SATC 303 (19 July 2023)

Court

Tax Court

Case number

IT45638

Judges

Binns-Ward, Warneke, Titus

The court found that the taxpayer's grant payment to Newco was not merely incidental to its income-earning operations but was directed at creating or materially expanding a source of future income. The expenditure resulted in an enduring benefit for the taxpayer, as it secured a long-term supply of grapes to market, thereby enhancing its income-producing structure. The quantum and nature of the expenditure, as well as the group relationship and practical certainty of future benefit, pointed strongly to its capital character. The deduction was therefore rightly disallowed. Regarding the penalt…

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• Income Tax Deduction
• Capital Vs Revenue Expenditure
• Penalty Remission
• Interest On Underpayment

B v Commissioner for the South African Revenue Service (13395)

B v Commissioner for the South African Revenue Service (13395) [2021] ZATC 5; 83 SATC 545 (23 April 2021)

Court

Tax Court

Case number

13395

Judges

L R Adams, F Venter, I Nkama

Tax Court CGT appeal on sale of shares: proceeds accrued in 2009, base cost derived from amnesty valuation, and the assessment was altered accordingly.

• Capital Gains Tax
• Base Cost Determination
• Exchange Control Amnesty
• Assessment Alteration
• Additional Tax Penalty
• Interest On Underpayment

Commissioner for the South African Revenue Service v Executor of the Estate late Lot Maduke Ndlovu (A395/2016)

Commissioner for the South African Revenue Service v Executor of the Estate late Lot Maduke Ndlovu (A395/2016) [2020] ZAGPPHC 601; 83 SATC 165 (12 October 2020)

Court

North Gauteng High Court, Pretoria

Case number

A395/2016

Judges

Pretorius, Tolmay, Maakane

The High Court held that the respondent was not entitled to raise the issue of section 89quat interest for the first time on appeal, as it was not part of the original objection or grounds of appeal. The Court found that remission of the 10% additional tax was not warranted, as SARS had already considered extenuating circumstances and reduced the penalty from 200% to 10%. The respondent, as a senior banking executive, was expected to exercise a higher degree of care and was responsible for declaring the gain from share options, regardless of reliance on employer or scheme administrator. The C…

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• Income Tax Assessment
• Additional Tax
• Interest On Underpayment
• Remission Of Penalties
• Tax Objection And Appeal

Attieh v Commissioner for the South African Revenue Service (A5024/2015)

Attieh v Commissioner for the South African Revenue Service (A5024/2015) [2016] ZAGPJHC 371; 84 SATC 420 (11 August 2016)

Court

South Gauteng High Court, Johannesburg

Case number

A5024/2015

Judges

P.A. Meyer, K.E. Matojane, S.E. Weiner

The High Court held that the full share-sale price was received and accrued for capital gains tax, and that a later settlement payment to Globalcom was not deductible.

• Capital Gains Tax
• Income Tax Act
• Understatement Penalty
• Tax Administration Act
• Interpretation Of Statute
• Interest On Underpayment