South African Court Upholds SARS on Alternative VAT Apportionment Methods

A South African tax court ruling favored SARS and may affect companies using alternative VAT apportionment methods.
The court rejected a financial services provider’s transaction-based method, requiring a mixed turnover-based approach instead.
The taxpayer lost because it failed to provide strong empirical evidence that its proposed method was fair and reasonable.
The ruling shows that alternative methods must be supported by detailed, auditable data—not just by a higher VAT recovery outcome.
Companies seeking or using alternative apportionment methods may now face stricter scrutiny and need more robust documentation.

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.