Almost six years and two court cases later, a dispute between Absa and its wholly owned subsidiary United Towers, and the South African Revenue Service – about the group’s involvement in an impermissible tax avoidance arrangement – has been sent back to the drawing board.
Sars did not withdraw the notices and issued tax assessments on the tax benefit it believed Absa and its subsidiary received. The high court found that the anti-avoidance notices were premised upon an acceptance that Absa and United Towers were ignorant of the terms of the arrangement or scheme. “Whether they had knowledge of the full nature of the transactions which comprised the arrangement, and whether their sole or main purpose in participating was to secure a tax benefit, are matters of disputed fact.”The SCA held that it was a factual enquiry whether the arrangement constituted an “impermissible avoidance arrangement”. It was also a question of fact whether Absa and United Towers obtained a tax benefit.
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