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Legal Counsel – Dispute Resolution & Judgments – Supreme Court of Appeal (SCA) 2025–2023

6 March 2024 – Tax Administration Act, 2011

Search and seizure – Tax Administration Act 28 of 2011 (the TAA) – interpretation – sections 59(1) and 60(1) – execution of a warrant against third parties on premises identified in the warrant – section 61(3)(a) of TAA – permits search of anything on the premises identified in the warrant including motor vehicle parked on the premises on suspicion that it contains material relevant to the taxpayer.

Source: SARS Tariffs
Legal Counsel – Dispute Resolution & Judgments – Supreme Court of Appeal (SCA) 2025–2023

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Tax Directives involuntary transfer before retirement

6 March 2024 – Paragraph 2(1)(c) of the Second Schedule to the Act regulates the amount to be included as gross income for any year of assessment in respect of any amount transferred for the benefit of a member of a retirement fund on, or after normal retirement age, (as defined in the rules of the fund), but before the member elects to retire from that retirement fund, minus any deductions allowed under paragraph 6A of the Second Schedule to the Act.

Prior to 1 March 2022, paragraph 6A of the Second Schedule to the Act allowed the full value of the amounts transferred for the following transfers as deductions, resulting in these transfers taking place on a tax neutral basis:

  • Transfers from a pension fund into a pension preservation fund, provident preservation fund, or a retirement annuity fund; and
  • Transfers from a provident fund into a pension preservation fund, a provident preservation fund, or a retirement annuity fund.

From 1 March 2022, Paragraph 6A of the Second Schedule to the Act also allowed for transfers into a similar fund by a member of a pension preservation or provident preservation fund (who has reached normal retirement age in terms of the fund rules but has not yet opted to retire from the applicable preservation fund). As a result, these individual transfers would also take place on a tax neutral basis.

To ensure parity among members of retirement funds who are subject to an involuntary transfer — and who have reached normal retirement age in terms of the fund rules, but have not yet opted to retire from the fund — the following changes have been made in the Act:

  • Such individuals can have their retirement interest in that pension fund or provident fund transferred to another pension fund or provident fund without incurring a tax liability.
  • The value of the retirement interest, including any growth, will remain ring-fenced and preserved in the receiving pension or provident fund until the member retires from that fund. This means that these members will not be entitled to the payment of a withdrawal benefit in respect of the amount transferred.

If a member has reached retirement age, but has not opted to retire and is subject to an involuntary transfer, follow these application steps:

  • Go to Find a Form
  • Print Forms A and D from the SARS website.
  • Manually complete all required fields and select Transfer Before Retirement (Par 2[1][c]) as a reason for the directive.
  • Manually edit (scratch out) the transferee type so that the only options are either a Pension Fund or a Provident fund.

Email the completed Tax Directive application to contactus@sars.gov.za with the subject line, “Involuntary Transfer Before Retirement (Par 2[1][c]) Form A&D.

Processing time will be up to the standard 21 days.

Source: SARS Tariffs
Tax Directives involuntary transfer before retirement

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Media release – SARS welcomes High Court decision on BPSA

Monday 4 March 2024 – The Commissioner for the South African Revenue Service (SARS), Mr Edward Kieswetter, welcomed the High Court decision, which dismissed an application for leave to appeal by British Petroleum of South Africa (BPSA) to review the Commissioner’s decision to refuse its refund claims and levy forfeiture under the Promotion of Administrative Justice Act (PAJA).

In the same matter, the High Court also referred to trial BPSA’s review of the Commissioner’s further decision, taken in terms of section 88(2)(a)(i) of the Customs and Excise Act, 1964 (Act 91 of 1964), to levy payment in lieu of forfeiture on the allegedly exported fuel.

BPSA argued that the High Court should have referred the appeal on the Commissioner’s Customs determination to trial as well. The High Court refused this request on the basis that there was no dispute of facts on matters of Customs determination but only on forfeiture.

The High Court’s decision of last week Thursday, is a sequel to its earlier judgement of 12 January 2024 where it dismissed BPSA’s appeal under section 47(9)(e) of the Customs and Excise Act against determinations made under the Act by the Commissioner.

Those determinations were that BPSA did not qualify for refunds of duty paid on fuel that BPSA says was exported to Zimbabwe. This is so because BPSA cannot prove that fuel was exported to Zimbabwe, nor can it identify the consignee who received the export delivery in Zimbabwe.

Commissioner Kieswetter expressed his satisfaction that the court has provided legal certainty and clarity on how SARS should deal with ghost exports. He said: “SARS has had to deal with this phenomenon of phantom exports with attendant costs to the fiscus, resulting in underserved refunds.” SARS is working very hard to assist taxpayers to meet their legal obligations and facilitate trade. However, it will make it hard and costly for taxpayers who are engaged in non-compliant behaviour. “This will be pursued without fear, favour or prejudice,” he concluded.

For further information, please contact SARSMedia@sars.gov.za

Source: SARS Tariffs
Media release – SARS welcomes High Court decision on BPSA