S.Africa: TRM Daniel Erasmus Tax Court Practitioners WIN another tax case
Tax update – TRM Daniel Erasmus Tax Court Practitioners WIN another tax case
RECENT FINANCIAL MAIL ARTICLE
In Good Faith: SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... told to stop bullying – full judgment can be downloaded at bottom of this article
MOST taxpayers are a little fearful of the extensive powers enjoyed by the SA Revenue ServiceTax authorities are fundamental institutions within government frameworks, overseeing tax assessment, collection, and administration. Their operations ensure that tax laws are enforced and public funds are collected efficiently. This article delves into tax authorities' purpose, responsibilities, and structure, offering insights into their essential role in supporting government functions and economic stability. What is a Tax Authority? A tax authority is... (SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently...). So there’s something strangely fascinating when a court rules that the tax authorities have gone too farFunctional analysis is the cornerstone of transfer pricing and international tax compliance, ensuring that intercompany transactions adhere to the arm’s length principle. It evaluates the roles, contributions, and risk profiles of entities within a multinational enterprise (MNE) to determine how profits and costs should be allocated. This process ensures that related-party transactions reflect the pricing that independent enterprises would establish.... It’s rather like watching a teacher take down the playground bully. Judge Rishi Seegobin, sitting in the high court, Durban, presided over this particular SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... application.
He characterised the case as “extraordinary” and in at least two respects it was. It concerns “grand scale” Vat fraud: Petrus Badenhorst, trading as SA Global Trading, owes SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... more than R800m, though he’s insolvent and SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... has no hope of getting anything out of him.
A second “extraordinary” feature was how SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... chose to conduct its battle against Badenhorst’s alleged co-conspirators. Instead of laying criminal charges against them, SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... first asked the high court in Pretoria to sanction an in camera inquiry normally used to make recalcitrant taxpayers answer questions so their tax liabilityTax liability represents the total amount of tax owed by an individual or business to a tax authority, whether local, national, or international. This obligation arises through various forms of income, profits, or transactions subject to taxation laws and regulations. Understanding tax liability is essential for compliance and efficient financial management for corporations and individuals. It influences how businesses structure... can be determined. In this case, however, Badenhorst’s alleged co-conspirator Jacques Sassin was told up front that he was being investigated for fraud.
Even though SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... was conducting what amounted to a pretrial criminal investigation into tax fraud, Sassin was not told he had the right to silence but was compelled to answer. And, at the end of the inquiry, based on Sassin’s own evidence, SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... came to court in Durban and applied for Sassin to be declared a “co-wrongdoer” with Badenhorst, liable for R370m.
Badenhorst’s fraud was predicated on a Vat 103 certificate, used to obtain animal feed at a zero Vat rate, though he was not allowed to use the certificate for trading. Sassin, meanwhile, working with a company called Benietha, bought and sold animal feed products, sometimes doing business with Badenhorst’s SA Global.
In 2012 the two dealers made increasingly complex buying and selling arrangements between themselves. And after April 2013 their nominal “trade” reached such levels that neither company could have handled the volumes if physical delivery were ever to have taken place.
Investigations by SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... led to the inquiry that SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... claims showed a strong case against Sassin. After Sassin challenged the SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... strategy, the judge agreed it was not appropriate for SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... to use motion court proceedings — where matters are decided on papers and argument — to resolve fraud allegations. Sassin had to be allowed to give evidence himself and cross-examine witnesses. In addition, SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... had not been able to prove the authenticity of the evidence from its secret inquiry, and refused to give Sassin a full transcript or see the documents referred to in the inquiry.
The judge commented: “The position adopted by SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... is that a finding of fraud must be made against Sassin based on the so-called ‘evidence’ gathered by it, without affording Sassin an opportunity to cross-examine his accusers and/or to give oral evidence to clear his name. No court … should be prepared to make such a finding on paper.”
Sars’s strategy was wrong and unfair, and the way it tried to introduce evidence from the inquiry was “improper and an abuse of the court process”.
SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... had an important function of collecting taxes, but in this case it tried to achieve its aims “in an unfair, unconstitutional and prejudicial manner”. Courts should not “sanction any conduct (by SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently...) which falls foul of the constitution and the bill of rights.” The dispute has been referred to trial, with costs awarded against SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently....
Will that trial ever take place? Or will SarsThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... settle on the basis, already offered by Sassin, that he repay the remaining available funds from Badenhorst’s scheme? Who knows? But either way, given the court’s disapproval of Sars’s behaviour, the tax authorities will presumably not try this particular sleight of hand in the future.
HERE is a full copy of the judgment:
Responses