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On October 21 2016 the High Court (Gauteng Division, Pretoria) delivered its decision in BMW South Africa (Pty) Ltd v The Commissioner of the South African Revenue Service.

The applicant was a vendor for value added tax (VAT) purposes. The respondent, the South African Revenue Service (SARS), had found that the applicant failed to pay certain amounts of VAT due for the October 2011 to February 2012 VAT periods. 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, and that SARS had incorrectly allocated the amount paid.

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

At first, SARS indicated no intention to oppose the application and eventually consented to an order setting aside the finding of non-payment and instructing the penalties and interest to be remitted. SARS also consented to costs on an attorney-client scale and costs of senior counsel.

However, the matter came to be heard in court. 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 were now to be remitted.

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

In Shuttleworth, the court had confirmed that amounts paid under protest can be recovered in accordance with condictio indebiti (ie, when a plaintiff pays the defendant by mistake what it is not bound to pay either in fact or in law, it may recover the amount), together with interest.

The court also cited Sections 187, 188 and 190 of the Tax Administration Act (28/2011), which provide for interest to be incurred on refundable amounts.

Accordingly, the court granted an order to the effect that SARS must pay interest tempore morae (ie, from the date on which the obligation became due) on the amounts paid by the applicant under protest.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

September 2017

 

 

An unfortunate experience with SARS South Africa -

The High Court (Gauteng Division, Pretoria) recently found that the South African Revenue Service (SARS) erred in its finding that the applicant had failed to pay certain amounts of value added tax and incorrectly levied penalties and interest. On the facts, it appeared that the applicant had made payment as required, and that SARS had incorrectly allocated the amount paid. As such, the court granted an order to the effect that SARS must pay interest on the amounts paid by the applicant under protest...read more


Luxembourg. Modernisation of Company Law: new act recognises simplified winding-up procedure.

Following the recent enactment of the act modernising the Company Law 1915, Luxembourg law now officially recognises the possibility for companies to be wound up by means of a simplified procedure. Although a simplified procedure had previously existed in notarial practice, it lacked a clear legal basis. The new procedure is an unquestionably useful tool which will further enhance Luxembourg'sbusiness friendly.......read more


United Kingdom

Dividends, directors' duties and transactions defrauding creditors

A recent High Court case provides useful guidance on the requirement that directors take into account the contingent and prospective liabilities of the company when forming their opinions on its solvency. It is also the first English case to hold that dividends may be liable to challenge as a transaction defrauding creditors. It will be interesting to see where a change of position defence is available to a person entering into such a transaction ..read more


Reforms to taxation of non-UK domiciled individuals

The government recently published long-awaited draft legislation for the reform of the taxation of non-UK domiciled individuals. It includes provisions to bring into the scope of inheritance tax UK residential property held by non-domiciliaries through offshore companies and other entities, together with provisions introducing new deemed domicile rules for long-term UK residents and individuals born in the United Kingdom with a UK domicile of origin........ read more..


China- CFDA solicits comments on pharmaceutical GCPs

The China Food and Drug Administration (CFDA) recently proposed the most comprehensive revisions of the pharmaceutical good clinical practices (GCPs) in 13 years, which are open for public comment until January 31 2017...read more..


 

 
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