Supreme Court Ruling Favors Woolworths in VAT Dispute Over Enterprise Activities and Share Issuance

• The Supreme Court of Appeal ruled in favor of Woolworths Holdings Limited regarding input VAT claims.
• Woolworths was involved in a dispute over VAT on fees from a rights offer to fund the acquisition of David Jones.
• SARS argued the rights offer was an isolated transaction, not part of Woolworths’ regular enterprise activities.
• Woolworths claimed the fees as input tax, asserting the share issue was part of its enterprise as an investment holding company.
• The SCA rejected the narrow approach, confirming Woolworths’ activities as an active investment holding company.
• The judgment emphasized a comprehensive view of a vendor’s activities, not isolating single transactions.
• The court recognized capital-raising as integral to an investment holding company’s enterprise.
• Woolworths’ services from foreign underwriters were not considered imported services subject to additional VAT.

Source: pkf.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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