Please enable JavaScript.
Coggle requires JavaScript to display documents.
Court Cases - Coggle Diagram
Court Cases
VAT
Respublica
The issue was whether Respublica supplied "commercial accommodation" and should therefore levy VAT at 60%, or if they provided lodging to TUT.
When assessing VAT consequences, one must characterise the relationship by reference to the contracts and then consider whether that characterisation is destroyed by facts.
Respublica owned a property and leased it to Tshwane University of Technology (TUT) for student accommodation only, with the possibility of accommodating holiday groups during university vacations.
The judges decided that Respublica did not provide lodging/accommodation to TUT as the relevant contractual rights and obligations were those between Respublica and TUT, not TUT's students.
Consol Glass
Consol claimed VAT input deductions for the VAT levied by SA advisors and did not impose VAT on imported services rendered by foreign advisors.
Consol sought advice services to refinance the Eurobonds to ZAR denominated funding from South African Banks.
SARS denied the VAT input deductions for VAT levied by SA advisors and imposed VAT output on the service fees from foreign advisors.
Over the years, the Rand depreciated against the Euro, making it difficult for Consol to meet its bond and hedging obligations.
The issue was whether the services were acquired for the purposes of making taxable supplies or non-taxable supplies.
Consol Glass acquired and consolidated 3 businesses using Eurobonds and collateral hedging agreements.
The court found that Consol was supplied a financial service but did not become a supplier of financial services, and there was no link between the costs incurred for restructuring advice and the furtherance of the enterprise.
British Airways
South African Revenue Service (SARS) argued that the passenger service charge should be subject to VAT, despite the flight fare being zero-rated
-
-
The court ruled that British Airways could not be required to pay VAT on a service it did not supply
British Airways recovered a passenger service charge on behalf of Airport Company Limited, a South African company
VAT is only levied on services provided by a vendor, not on receipts for services provided by others.
-
VAT Continued
Master Currency
Master Currency converted South African rand to foreign currency for non-resident passengers, charging an exchange rate margin, commission and transaction fee
Dispute with SARS whether Master Currency was obliged to levy and pay VAT at standard rate of 14% or at 0% for non-resident passengers
-
Judge ruled that duty-free areas at international airports in South Africa are part of the Republic and thus services rendered in these areas are services rendered in South Africa and should be standard rated for VAT purposes
-
Section 11(2)(l) provides for zero-rating of services supplied by a vendor to a non-resident subject to certain conditions, but if the non-resident is in the Republic at the time the services are rendered, the supply is not zero-rated
Gross Income
Residency
Cohen
Physical absence is not the only determining factor for residency. A person is ordinarily resident in the country to which he intends to return from all his wanderings, i.e. where he regards as his real home.
Kuttel
A person is ordinarily resident where the person’s principle residence is – where the person is habitually and normally resident.
-
-