ARTICLE · 10 MARCH 2021

Tax In Brief | Issue 58

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Below, please find issue 58 of ENSafrica's tax in brief, a snapshot of the latest tax developments in South Africa.

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Below, please find issue 58 of ENSafrica's tax in brief, a snapshot of the latest tax developments in South Africa.

CASE LAW

Tax Court of South Africa I ABC Bank Limited v Commissioner for the South African Revenue Service SARSTC VAT 1904 [2020] (26 November 2020)
- The appellant claimed a deduction under section 16(3)(c) of the VAT Act, 1991 (the "VAT Act") for their unsecured lending business in which they would, upon the retrenchment or death of their clients, settle their outstanding loans up to a specified amount.
- ABC does not charge any fees for the loan cover but does charge an initiation fee, service fees and interest.
- The South African Revenue Service ("SARS") contends that the loan cover payments do not qualify for an input tax deduction in terms of section 16(3)(c) of the VAT Act because the supply of the loan cover did not constitute a "taxable supply" in that: (1) the loan cover was provided for no "consideration" and accordingly the

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