South Africa Case Law

Taxpayer Trust Commissioner for the South African Revenue Service (IT 76795)

Taxpayer Trust Commissioner for the South African Revenue Service (IT 76795) [2025] ZATC 1 (13 January 2025)

Court

Tax Court

Case number

IT 76795

Judges

Myburgh AJ, Dr Alison Futter, Ms Sonja Jordaan

The court held that the raising fees paid by the taxpayer to Sanlam for arranging loan facilities are 'interest or similar finance charges' as envisaged by section 24J(1) of the Income Tax Act. The definition of 'interest' in section 24J is intentionally broad, encompassing not only traditional interest but also charges that bear a relevant resemblance to interest, such as raising fees. The court found that the raising fees are closely connected to the loans, are calculated as a percentage of the capital raised, and are a condition for drawing down the loans. Differences in timing, periodicit…

Source excerpt

• Deductibility Of Finance Charges
• Interpretation Of Interest
• Section 24j Income Tax Act
• Raising Fees
• Contra Fiscum Rule