South Africa: Sales Taxes: VAT, GST

ENS's Tax in Brief Issue 176 delivers a comprehensive roundup of recent South African tax developments, including critical Tax Court and High Court judgments on VAT deductions, understatement penalties, and share block company taxation. The publication examines SARS's latest interpretation notes, regulatory amendments to export regulations and customs duties, and updates to compliance processes including the CRS Trade Testing Programme and employer reconciliation requirements.

The South African Revenue Service has launched a modernised Diesel Refund System on eFiling, fundamentally changing how businesses register for and manage diesel refund claims. This digital transformation introduces a standalone platform that replaces the VAT-linked model, requiring all existing users to reregister and establish electronic supplier relationships. The transition will occur in phases, with standalone claims functionality expected in 2027 while the current system continues operating in paralle

The Tax Court has ruled on whether a taxpayer may amend its appeal statement to introduce new factual grounds supporting a disputed VAT input tax deduction, years after the original objection was filed. The decision clarifies the boundaries of Rule 32(3) of the Tax Court Rules and examines when late amendments will be permitted despite weak explanations for delay.

South Africa's renewable energy sector is rapidly transforming as the IPPPP targets 20,340 MW by 2030. With grid constraints, market restructuring, and rising energy demand reshaping the landscape, maintaining strategic alignment with tax policy has become critical for Independent Power Producers (IPPs) and investors navigating capital allowances, cross-border structuring, transfer pricing, VAT complexities, and carbon tax implications.

This issue of ENS' tax in brief provides a comprehensive snapshot of recent tax developments in South Africa, covering significant Supreme Court and High Court judgments on taxpayer representation and customs seizures, legislative amendments to customs rules and fuel levies, SARS publications on compliance requirements, and updates on exchange control regulations including crypto asset treatment.

The African Tax Administration Forum and OECD have concluded transfer pricing workshops for Francophone tax officials, while multiple African nations implement significant tax reforms including VAT changes, e-invoicing requirements, and new compliance measures. From Kenya's reduced petroleum VAT rates to Liberia's comprehensive tax amendments and Uganda's proposed alternative minimum tax, these developments reflect a continent-wide effort to modernize tax administration and enhance revenue collection.

The 2025 Update to the OECD Model Tax Convention Commentaries provides guidance on when a home or remote location can give rise to a fixed place of business PE under Article 5(1).

According to the OECD's Revenue Statistics in Africa 2025 report released in December 2025, tax revenues as a percentage of GDP have increased in 24 countries...

The Appellant (KRA) initiated an audit on the Respondent (Sendy Limited), a digital platform connecting third-party transporters to customers. KRA raised a VAT assessment of Kshs 82,248,150.74 on Sendy's gross receipts...