Sars Loses Appeal: Court Rules VAT Refunds Can’t Offset Pre-Business Rescue Tax Debts

• Sars lost a case against Henque 3935cc over tax refunds worth over R1-million.
• The Supreme Court of Appeal ruled Sars could not use VAT refunds to settle older tax debts.
• Henque operated around 40 stores and entered business rescue in January 2018.
• Henque declared a loss for the 2017 financial year, resulting in no tax due.
• Sars audited the return and later used VAT refunds to pay off 2017 tax liability.
• Henque argued the debts were pre-business rescue, while Sars disagreed.
• The court ruled the debts were pre-business rescue liabilities.
• The appeal was upheld with costs.

Source: sundayworld.co.za

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.

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