Delta Beverages Ltd, a subsidiary of Delta Corporation, had been issued a tax assessment for FY 2009, 2010, 2011, 2012, 2013 and 2014 where various fees for service, technology license of trademarks, technology and know-how paid to a group company in the Netherlands (SAB Miller Management BV) had been disallowed by the tax authorities (Zimra) of Zimbabwe resulting in additional taxes of US$42 million which was later reduced to US$30 million. An appeal was filed with the Special Court (for Income Tax Appeals) where, in a judgment dated 11 October 2019, parts of the assessment was set aside. Not satisfied with the result, an appeal (Delta Beverages) and cross-appeal (tax authorities) was filed with the Supreme Court. Judgement of the Supreme Court. The Supreme Court set aside the judgement of the Special Court (for Income Tax Appeals) and remanded the case for reconsiderations in relation to the issue of tax avoidance. Excerpts from the Supreme Court judgement regarding deductions for ... Read more

The issue before the Supreme Court of Appeal was whether a tax assessment issued by the Commissioner for the South African Revenue Service (SARS), in terms of the Income Tax Act 58 of 1962, for the year 2006 were to be set aside. MTN International Ltd had claimed interest deductions on loans it had incurred as expenditure against its gross income for the year of assessment. On 31 March 2011, which was the last day before the original assessment by SARS was due to prescribe, SARS issued a revised assessment, disallowing deduction of the interest expenditure. The tax assessment resulted in an income tax liability of R 73.476.101 of MTN International Ltd. When issuing the tax assessment the officer at SARS manually fixed the ‘due date’ as 30 March 2011, being one day prior to the day on which the assessment was actually issued. MTN International Ltd applied the High Court to have the tax assessment set aside, on the ... Read more

According to the tax authorities, the prices agreed between the P.S. and her husband, as lessors, and Long Wave, s.r.o. (‘Long Wave’), as lessee, differed from the prices which would have been agreed between independent persons in normal commercial relations under the same or similar conditions. According to the tax authorities, P.S., together with her husband and Long Wave, are persons who have created a legal relationship mainly for the purpose of reducing the tax base. According to the appellant, P.S, the conditions laid down in the judgment of the Supreme Administrative Court of 31 March 2009, No 8 Afs 80/2007-105, were not met and the tax administrator’s procedure for determining the normal price was seriously flawed. Judgement of the Court The Supreme Administrative Court concluded that the appeal as a whole was unfounded and therefore dismissed it Excerpt “In the present case, the complainant was informed of the difference in the agreed prices and at the same time asked ... Read more