ENSafrica tax revenews | 11 April 2018

ENSafrica tax revenews

by the tax department

Below, please find issue 2 of ENSafrica’s tax revenews, a snapshot of the latest tax developments in South Africa. 

case law

High Court, Western Cape Division: L Taxpayer v CSARS

  • deductibility of interest expenditure: the closeness of connection between interest expenditure on an access bond and interest earned from time to time on the taxpayer’s working capital loan to his firm, is considered. 
  • the taxpayer’s purpose in incurring interest expenditure is determinative. 
  • practice note 31 is considered. 
  • find a copy of the judgment here.

High Court, Western Cape Division: CSARS v Short and Another 

  • transfer duty: whether the purported transfer of habitatio and bare dominium over fixed property can be treated as separate transactions in terms of the Transfer Duty Act, 1949 
  • the proper construction of the deed of sale indicated that the object of the sale was full dominium. 
  • transfer duty was therefore payable on the aggregate consideration payable to the seller. 
  • find a copy of the judgment here.

Supreme Court of Appeal: Lion Match Company (Pty) Ltd v CSARS 

  • Tax Administration Act, 2011: tax court rules whether the decision by the tax court to dismiss the application by the taxpayer that the South African Revenue Service (“SARS”) novated the disputed assessment in terms of rule 31(3) is appealable. 
  • whether the decision can be corrected “forthwith and independently of the outcome of the main proceedings” and whether the decision of tax court may be appealed in isolation before outcome of the main proceedings. 
  • the tax court is a creature of statute and the taxpayer is not empowered to appeal this decision. 
  • find a copy of the judgment here.

SARS publications

Interpretation note 35 (issue 4): employees’ tax: personal service providers and labour brokers

  • find a copy of the note here.

Guide on the determination of medical tax credits (issue 9)

  • find a copy of the guide here.

Guide to understatement penalties

  • find a copy of the guide here.

Short guide to the Tax Administration Act, 2011

  • find a copy of the guide here.

Frequently asked questions: increase in the value-added tax (“VAT”) rate (issue 3)

  • find a copy of the FAQ here.

Draft guide on the calculation of the tax payable on lump sum benefits (issue 3)

  • find a copy of the draft guide here.


  • The Organisation for Economic Co-operation and Development has published a new edition of the Common Reporting Standard handbook on the implementation of Standard for Automatic Exchange of Financial Information in Tax Matters
    • find the handbook here.

other important developments

  • The South African Reserve Bank imposes administrative sanctions on five authorised dealers in foreign exchange with limited authority. 
    • find a copy of the media statement here.
  • SARS publishes updated Table 3 (rates at which interest-free or low interest loans are subject to income tax in terms of the “official rate of interest”). 
    • find a copy of the updated table here.
  • SARS releases media statement on the tax treatment of cryptocurrencies: 
    • cryptocurrencies are to be treated according to ordinary income tax principles. 
    • proceeds on disposal can be treated as revenue or capital in nature. 
    • pending policy clarity, SARS will not require VAT registration as a vendor for supply of cryptocurrencies. 
      • find the media release here
      • find SARS frequently asked questions on cryptocurrencies here
      • find an ENSafrica tax newsflash containing further details here.

No information provided herein may in any way be construed as legal advice from ENSafrica and/or any of its personnel. Professional advice must be sought from ENSafrica before any action is taken based on the information provided herein, and consent must be obtained from ENSafrica before the information provided herein is reproduced in any way. ENSafrica disclaims any responsibility for positions taken without due consultation and/or information reproduced without due consent, and no person shall have any claim of any nature whatsoever arising out of, or in connection with, the information provided herein against ENSafrica and/or any of its personnel. Any values, such as currency (and their indicators), and/or dates provided herein are indicative and for information purposes only, and ENSafrica does not warrant the correctness, completeness or accuracy of the information provided herein in any way.



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