South Africa: Tax

A South African High Court has ruled on the lawfulness of account freezing by banks based on fraud suspicions and affirmed SARS's authority to issue third-party notices under section 179 of the Tax Administration Act. The case arose after a close corporation fraudulently claimed a VAT refund of R3.28 million, transferred R900,000 to an individual's account, prompting the bank to freeze the account and SARS to pursue recovery through a third-party notice.

The South African Revenue Service has launched a modernised Diesel Refund System on eFiling, fundamentally changing how businesses register for and manage diesel refund claims. This digital transformation introduces a standalone platform that replaces the VAT-linked model, requiring all existing users to reregister and establish electronic supplier relationships. The transition will occur in phases, with standalone claims functionality expected in 2027 while the current system continues operating in paralle

ENS's Tax in Brief Issue 176 delivers a comprehensive roundup of recent South African tax developments, including critical Tax Court and High Court judgments on VAT deductions, understatement penalties, and share block company taxation. The publication examines SARS's latest interpretation notes, regulatory amendments to export regulations and customs duties, and updates to compliance processes including the CRS Trade Testing Programme and employer reconciliation requirements.