https://www.polity.org.za
Deepening Democracy through Access to Information
Home / Legal Briefs / Cliffe Dekker Hofmeyr RSS ← Back
Close

Email this article

separate emails by commas, maximum limit of 4 addresses

Sponsored by

Close

Embed Video

A taxpayer’s unfortunate experience with SARS

A taxpayer’s unfortunate experience with SARS

21st November 2016

SAVE THIS ARTICLE      EMAIL THIS ARTICLE

Font size: -+

On 21 October 2016 judgment was handed down by the High Court (Gauteng Division, Pretoria) in the matter of BMW South Africa (Pty) Ltd v The Commissioner of the South African Revenue Service (as yet unreported).

Briefly, the applicant (Applicant) was a vendor for purposes of Value-added Tax (VAT). The respondent, being the South African Revenue Service (SARS), had made a finding that the Applicant did not pay certain amounts of VAT due in respect of the October 2011 to February 2012 VAT periods.

Advertisement

As a result, SARS levied penalties and interest in respect of the amounts not paid.

However, on the facts, it appeared that the Applicant had made payment as required, but for some unknown reason SARS had not correctly allocated the amount paid.

Advertisement

The Applicant presented proof of payment to SARS, but SARS still insisted that the penalties and interest should be paid. The Applicant paid the amounts under protest, and proceeded to bring an application in the High Court.

SARS did not at first indicate any intention to oppose the application, and eventually consented to an order setting aside the finding of non-payment and that the penalties and interest be remitted. SARS also consented to costs on an attorney-client scale, and costs of senior counsel.

However, the matter did come to be heard, and SARS was represented by counsel who sought only to oppose a limited issue: whether the Applicant should be entitled to interest in respect of the amounts that it had paid under protest and which should now be remitted.

Based on the decision in Shuttleworth v South African Reserve Bank 2015 (1) SA 586 (SCA), the court held that the Applicant was entitled to interest.

In the Shuttleworth case the court confirmed that amounts paid under protest can be recovered under the condictio indebiti, together with interest.

The court also cited s187, s188 and s190 of the Tax Administration Act, No 28 of 2011, which provides for interest to run on refundable amounts.

Accordingly, the court granted an order to the effect that SARS must pay interest a tempore morae on the amounts paid by the Applicant under protest.

Written by Heinrich Louw, Cliffe Dekker Hofmeyr Senior Associate in the Tax and Exchange Control Practice

EMAIL THIS ARTICLE      SAVE THIS ARTICLE

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here

Comment Guidelines

About

Polity.org.za is a product of Creamer Media.
www.creamermedia.co.za

Other Creamer Media Products include:
Engineering News
Mining Weekly
Research Channel Africa

Read more

Subscriptions

We offer a variety of subscriptions to our Magazine, Website, PDF Reports and our photo library.

Subscriptions are available via the Creamer Media Store.

View store

Advertise

Advertising on Polity.org.za is an effective way to build and consolidate a company's profile among clients and prospective clients. Email advertising@creamermedia.co.za

View options
Free daily email newsletter Register Now