Tax In Brief

Below, please find issue 147 of ENS' tax in brief, a snapshot of the latest tax developments in South Africa.

case law

• Bottom Line Solutions (Pty) Ltd trading as BLS Portco SA v CSARS (27441/2020) [2025] ZAGPPHC 476 (12 May 2025)
  • This is a review application by Bottom Line Solutions (Pty) Ltd ("BLS"), operating as 'a clearing agent' in terms of the provisions of the Customs and Excise Act, No. 91 of 1964 (the "CEA"), to set aside a demand by the South African Revenue Service ("SARS") in respect of liability for customs duty, value-added tax ("VAT"), penalties, interest and other charges associated with the deemed diversion or exportation of goods.
  • BLS contends that the demand or assertions of liability on its part by SARS is unreasonable, irrational and failure by SARS to apply its mind to the relevant legal provisions, facts and circumstances of the matter, and, thus, ought to be reviewed and set aside in terms of the common law and the Promotion of Administrative Justice Act, No. 3 of 2000.
  • The review is opposed by SARS mainly on the ground that BLS is liable in its role as an agent in terms of section 99(2) of the CEA, as the impugned goods are deemed to have been diverted instead of being exported as declared.
  • The application was dismissed with costs on the basis that the demand by SARS is devoid of unreasonableness and irrationality.
  • Please find a copy of the judgment here.
• Poseidon Operations (Pty) Ltd v CSARS and Others (23278/2022) [2025] ZAGPPHC 539 (26 May 2025)
  • Poseidon Operations (Pty) Ltd ("Poseidon Operations"), acting as a clearing agent for goods exported to the Democratic Republic of Congo ("DRC"), took the decision of the Commissioner for the South African Revenue Service ("SARS") to levy customs duties, penalties, and an amount in lieu of forfeiture, on review.
  • The High Court found that:
    • SARS had not fully investigated the matter nor provided Poseidon Operations with adequate information to address the allegations.
    • SARS' investigation was incomplete and lacked critical evidence that could substantiate the claims of diversion.
  • The High Court set aside SARS' enforcement measures and held that Poseidon Operations had demonstrated sufficient grounds to invoke remission of penalties under section 93(2) of the Customs and Excise Act, 1964 ("Customs and Excise Act").
  • Find a copy of the judgment here.
• Commissioner for the South African Revenue Service v Virgin Mobile South Africa (Pty) Ltd (1303/2023) [2025] ZASCA 77 (04 June 2025)
  • SARS missed the deadline to file its Tax Court Rule 31 statement of grounds of assessment in a Tax Court appeal by Virgin Mobile South Africa (Pty) Ltd ("Virgin Mobile").
  • Virgin Mobile served a Tax Court Rule 56(1) notice to address SARS' failure to file on time, and SARS filed its statement five days later.
  • Virgin Mobile applied for a default judgment on the basis that SARS failed to apply for condonation for the late filing.
  • The Supreme Court of Appeal ("SCA") found that:
    • Once a party complies with a Tax Court Rule 56(1) notice within the specified period, there is no need for condonation.
    • The primary objective of Tax Court Rule 56(1) is to secure compliance with procedural timelines, not to punish parties for initial noncompliance if they subsequently remedy the default within the notice period.
    • Allowing a default judgment application to proceed in these circumstances would undermine the remedial purpose of the notice and introduce unnecessary rigidity into the process.
    • By complying within the period specified in the Rule 56(1) notice, the defaulting party effectively cures its default, and the matter should proceed as if the procedural step had been taken timeously.
  • As a result, the SCA held that the default judgment application was an irregular step, set it aside, and ordered costs against the taxpayer.
  • Find a copy of the judgment here.

legislation and draft legislation

• Draft Tax Administration Act, 2011 ("TAA") notice | administrative noncompliance penalty in terms of section 210(2) of the TAA
  • The draft notice provides incidences of non-compliance by a person in terms of section 210(2) of the TAA, that are subject to a fixed amount penalty in accordance with sections 210(1) and 211 of the TAA.
  • Due date for comment is 27 June 2025.
  • Find the explanatory note here.
  • Find a copy of the draft notice here.

SARS publications

• Income Tax Act, 1962 | Average Exchange Rates
  • Table A - A list of the average exchange rates of selected currencies for a year of assessment as from December 2003.
  • Table B - A list of the monthly average exchange rates to assist a person whose year of assessment is shorter or longer than 12 months.
  • Find an example of how to calculate the Average Exchange Rate for a period longer than 12 months here.
• VAT Guide | VAT 420 – Guide for Motor Dealers (Issue 3)
  • The guide concerns the application of the VAT legislation in respect of vendors that supply motor cars and other vehicles (motor dealers).
  • Find a copy of the guide here.
• Filing season | 2025 dates
  • The dates for the 2025 Filing Season are:
    • Auto-assessments: 7 – 20 July 2025
    • Filing season opens for non-provisional taxpayers who were not autoassessed: 21 July – 20 October 2025
    • Provisional taxpayers: 21 July – 19 January 2026
  • Find more information here
• Media release | Appointment of Ms Mary Baine as the new Executive Secretary of the African Tax Administration Forum
  • The appointment is effective from 1 July 2025.
  • Find more information here
• Media release | Tax Practitioner Connect Issue 63
  • In this issue, SARS provides guidance on simplifying tax compliance for both taxpayers and third-party data providers.
  • Read the latest issue here.
• VAT Connect Issue 9
  • This issue deals with recent amendments, the retraction of the increase in the VAT rate, changes to the VAT refund administrator and newly published publications.
  • Find the latest issue here.
• Guides
  • Guide to Advance Tax Rulings (Issue 2)
    • This guide provides guidance in respect of the application for an advanced ruling and an overview of the Advance Tax Ruling ("ATR") process
    • Find a copy of the guide here.
    • Find the Quick Reference Guide – ATR System here.
  • Guide on the Tax Treatment of the Net-billing Tariff System for Excess Power
    • This guide provides general guidance on the tax treatment of credits due to taxpayers for excess power generated from renewable energy sources and exported via the grid.
    • Guidance is also provided on the tax treatment of the various expenses that are incurred by the taxpayer in generating such electricity.
    • Find a copy of the guide here.

exchange control

• Exchange control circulars
  • Exchange Control Circular No. 9/2025
    • Currently, residents (natural persons) over the age of 18 years and foreign nationals may avail of a travel allowance within the single discretionary allowance limit of R1 000 000 per calendar year. Resident individuals who are under the age of 18 years may avail of a travel allowance not exceeding an amount of R200,000 per calendar year.
    • The travel allowance is subject to the provisions of Exchange Control Regulation 2(5), which requires unused foreign currency to be resold either to an Authorised Dealer or an Authorised Dealer in foreign exchange with limited authority within 30 days of the traveller's return to South Africa.
    • Going forward, travellers will still be required to resell any unused foreign currency (physical cash, travel cards and/or swift transfers that were reported as travel) to either an Authorised Dealer or an Authorised Dealer in foreign exchange with limited authority. Alternatively, the traveller may also deposit unused foreign currency into the traveller's foreign currency account at an Authorised Dealer within 30 days of the traveller's return to South Africa.
  • Exchange Control Circular No. 10/2025
    • In an effort to reduce red tape, Authorised Dealers may now allow resident agricultural commodity producers (agribusiness companies whose core business is the buying, selling or trading of raw materials or primary products as well as the management of commodities from origin through to the final customer) with firm commitments to hedge their foreign exposures on foreign commodity exchanges and/or a recognised member or broker of the foreign commodity exchange, provided suitable documentary evidence is presented and subject to the correct reporting to the Financial Surveillance Department of the South African Reserve Bank.
  • Exchange Control Circular No. 11/2025
    • Flowing from representations made, certain amendments to sections E.(A) and I.3(B) of the Currency and Exchanges Manual for Authorised Dealers ("Authorised Dealer Manual") were required to allow Authorised Dealers to adjudicate applications for inward foreign loans whereby the funds originate from a Non-resident Rand account.
    • Similarly, the repayment of interest and capital on the foreign loan may be effected to a Non-resident Rand account.
    • A change request must be submitted by the Authorised Dealer on the Financial Surveillance Department's Loan Reporting System, confirming that loan funds will be received from a Non-resident Rand account. In addition, the Authorised Dealer must submit a change request on the Loan Reporting System of any drawdowns from the Non-resident Rand account as well as any capital or interest payments to the Non-resident Rand account.
    • The rationale behind the above is to simplify the administration process for the Authorised Dealers by reducing the need to submit applications to the Financial Surveillance Department for these types of requests.
  • Please find copies of the Exchange Control Circulars here, here and here.

customs and excise

• Customs and Excise Act, 1964 | Tariff amendments
  • The following amendments have been published in Government Gazette 52791:
    • Notice R.6274 - Correction Notice – By the amendment of provisional payment in relation to anti-dumping duties against the alleged circumvention of the anti-dumping duties on new pneumatic tyres of rubber of a kind used in motor cars, in order to replace "Thailand" with "Vietnam under tariff subheading 4011.10.05 where it appears in Notice No. R. 6234 of Government Gazette No. 52750 dated 30 May 2025.
    • Notice R.6275 - Amendment to Part 5A of Schedule No. 1, by an increase of 16c/li in the rate of the general fuel levy for petrol from 385c/li to 401c/li and 15c/li for diesel from 370c/li to 385c/li, respectively as well as the substitution of Note 8 to give effect to the Budget proposals announced by the Minister of Finance on 21 May 2025.
    • Notice R.6276 - Amendment to Part 3 of Schedule No. 6, as a consequence of the increase in the general fuel levy as announced by the Minister of Finance in his budget speech on 21 May 2025; the diesel refund provisions are adjusted accordingly.
  • The following amendment has been published in Government Gazette No. 52812:
    • Notice R.6283 - Amendment to Part 1 of Schedule No. 2, by the substitution of anti-dumping items under 207.02, in order to replace the words "producer/exporter" with the word "producer" against the alleged dumping of new pneumatic tyres of rubber of a kind used on motor cars, buses or lorries classifiable in tariff heading 40.11, originating in or imported from the People's Republic of China.

international

• Organisation for Economic Co-Operation and Development ("OECD") | Launch of the OECD South Africa Economic Survey
  • Deputy Minister of Finance, Ashor Sarupen, highlighted several key points regarding tax policy and administration.
  • Amongst them was the OECD's recommendations, which the government acknowledges and is working to implement, include introducing stricter spending controls, reinforcing spending rules, and improving governance and administrative efficiency. These measures are closely linked to tax policy, as they aim to ensure that tax revenues are managed responsibly and that fiscal transfers, particularly to state-owned enterprises, are reduced through reform.
  • A significant development in tax policy is the reform of the carbon tax framework. As of January 2025, the carbon tax rate has increased to R236 per tonne. Furthermore, tax-free allowances will be progressively reduced starting in 2026.
  • Find a copy of the speaking notes here and OECD Economic Survey SA 2025 here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.