The South African Revenue Service SARS has scored another victory in court, emboldening its aggressive push to go after taxpayers who are trying to skirt or evade their tax obligations.
In the latest case, the Revenue Service applied General Anti-Avoidance Rules GAAR to a taxpayer who had been channelling their remuneration through foreign entities to avoid paying tax.
The taxpayer in question had for several years been doing so to generate Secondary Tax on Companies STC credits, re-characterising their compensation as tax-exempt dividends rather than taxable income.
However, when SARS sniffed this out, it disagreed with the process and applied GAAR to re-characterise the receipts as ordinary income.
