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SARS Must Comply with its Interpretation Notes: Commissioner for the South African Revenue Service v Medtronic International Trading S.A.R.L
- 11 March 2023
- SARS Issues
- The Tax Faculty
On 3 March 2023, the Supreme Court of Appeal in Commissioner for the South African Revenue Service v Medtronic International Trading SARL [2023] ZASCA 20 upheld the principle that the South African Revenue Service (SARS) must follow its own Interpretation Notes.
At para 10 of the judgment, Goosen AJ emphasized that SARS cannot deny the binding nature of Interpretation Notes. The Tax Administration Act defines "practice generally prevailing" as a practice outlined in an official publication, which includes Interpretation Notes. In Marshall and Others v Commissioner, South Africa Revenue Service 2019 (6) 246 (CC), the Constitutional Court established the importance of consistent interpretation of tax legislation by those responsible for its administration. Therefore, when SARS evaluates a taxpayer based on a "practice generally prevailing," it must apply its interpretation and application of the law consistently and cannot deviate from a prevailing practice.
Click here to access the judgment.
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