South Africa Tax Agency Posts High Court Judgment on VAT Payments Under Invalid Contract

The South African Revenue Service May 26 posted online the High Court Judgment for Case No. 51569/2020, on VAT payments under an invalid contract constituting dispositions not made for value. The taxpayer, a company, supplied locomotives, issued invoices, received consideration, and paid output VAT. The Tax Agency contended that the VAT payments were lawfully due under the VAT Act, arose at the time of invoicing or upon the receipt of consideration, including progress payments, and discharged a valid statutory liability, despite the later invalidation of the underlying contract. Upon review, the High Court found that the taxpayer: 1) made taxable ...