- South African Revenue Service posted Constitutional Court Judgment clarifying loan tax treatment under VAT Act
- Company provided loans, charged VAT on fees, claimed input deduction, took out insurance for loan repayment
- Tax Agency disallowed deduction related to loan cover payments, issued additional assessment
- Tax Court upheld taxpayer’s appeal, considered loan cover payments as taxable supplies within an enterprise
- Supreme Court of Appeal upheld Tax Agency’s appeal, found loan cover not exchanged for consideration
- Constitutional Court partially reversed Supreme Court of Appeal’s ruling, found Tax Agency’s disallowance of deduction incorrect
- Matter remitted back to Tax Agency for appropriate apportionment regarding taxable fees
Source: news.bloombergtax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
