In Delport v Le Roux and Others[1], the court’s judgment, delivered on 24 November 2022, is a r...
SARS draft interpretation note confirms taxation of payments to missionaries
Thursday, 19 November 2020
SARS recently issued a draft interpretation note about the taxation of amounts paid to missionaries. There has always been a view that amounts paid to missionaries from donations by supporters, often from outside South Africa, are not taxable because they are donations and not remuneration. Tax practitioners have not shared this view and have had
- Published in Income Tax
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Primary residence exclusion : don’t trifle with it
Tuesday, 19 May 2020
A taxpayer with just enough passing acquaintance with tax legislation to be dangerous had a bright idea in relation to the primary residence exclusion in the Eighth Schedule to the Income Tax Act. Having read five years ago that the first R2 million of a gain on disposal of your primary residence is excluded from
- Published in Capital gains tax, Income Tax
Clicks loses on section 24C claim for ClubCard
Tuesday, 14 January 2020
On 3 December 2019 the Supreme Court of Appeal delivered its judgment in the matter of CSARS v Clicks Retailers (Pty) Ltd Case No 58/2019 (not yet reported in SA Tax Cases). In doing so it reversed the decision of the tax court and disallowed the taxpayer’s claim for an allowance under section 24C of
- Published in Income Tax
Spur may deduct employee incentive scheme contribution
Friday, 10 January 2020
On 26 November 2018 a full bench of the Western Cape High Court confirmed by majority the decision of the tax court and found in favour of the taxpayer in CSARS v Spur Group (Pty) Ltd A285/2019 (not yet reported in SA Tax Cases). The taxpayer had claimed deductions under section 11(a) of the Income
- Published in Income Tax
CSARS v Atlas Copco : trading stock and IFRS
Tuesday, 29 October 2019
On 27 September 2019 the Supreme Court of Appeal (SCA) delivered its judgment in CSARS v Atlas Copco South Africa (Pty) Ltd[1]. In doing so the court drew heavily on its 2018 judgment in CSARS v Volkswagen SA (Pty) Ltd [2]. As was the case in Volkswagen, central to the issues in Atlas Copco were
- Published in Income Tax, Trading stock
Which factors affect the value of trading stock on hand?
Tuesday, 02 October 2018
On 19 September 2018 in CSARS v Volkswagen SA (Pty) Ltd (1028/2017) [2018] ZASCA 116 the Supreme Court of Appeal reversed the decision of the tax court and found in favour of SARS in a matter dealing with the valuation of trading stock on hand at the end of a financial year. Central to the
- Published in Income Tax
Donation to a special trust
Friday, 29 June 2018
On 28 June 2018 SARS issued an interesting binding private ruling, BPR 306, in which the applicant, a person in the early stages of dementia but still lucid and with the capacity to contract, distributed part of her estate to a special trust she had established for her care and maintenance. The distribution was ruled
- Published in Donations tax, Income Tax
Section 24C : future obligations in a “chain” restaurant
Friday, 09 March 2018
Section 24C of the Income Tax Act 1961 has been part of the Act since 1980 and has been a source of periodic disputes between taxpayers and SARS. Although it was originally intended for the construction industry, taxpayers have sought, with varying success, to bring their transactions within its provisions while SARS is alert to
- Published in Income Tax
Retrospective tax legislation – when is it acceptable?
Thursday, 15 June 2017
The Gauteng Division, Pretoria, of the High Court recently had occasion to consider the constitutionality of retrospective legislation, in Pienaar Brothers (Pty) Ltd v CSARS & the Minister of Finance Case 87760/2014 (not yet reported). The Court in effect condoned retrospective legislation where adequate warning existed of its imminent introduction. This article will not attempt
- Published in Income Tax, Interpretation of statutes
SARS clarifies tax treatment of non-executive directors
Tuesday, 21 February 2017
The question whether non-executive directors (NED) of companies are employees or independent contractors has bedevilled taxpayers, and especially the payroll departments of companies, for years. The question is important because it goes to whether their fees are remuneration, and subject to PAYE, or fees for independent services, and potentially falling within the VAT net. Following
- Published in Income Tax, Non-executive directors, Value-added tax