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The battle between SARS and Christo Wiese is very far from over.

However, the first-round win must be awarded to SARS after the Western Cape High Court ruled in the tax man’s favour with regard to the existence of tax debt in a showdown that digs deep into the nitty-gritty of South African tax laws.

SARS is after a total of R216 million from Wiese and three colleagues, dating back to 2007.

News24 has the details:

The case deals with how London-headquartered multinational oil concern Tullow Oil transferred the ownership of oil assets out of South Africa in 2007.

According to the tax agency, Tullow created an “elaborate set of arrangements” to extract its South African assets without paying tax.

SARS has argued that the scheme Tullow Oil came up with was not merely savvy tax planning, but crossed the line into tax avoidance.

There’s a clear difference between what reputable tax practitioners like Galbraith | Rushby do, which includes offering professional tax compliance and advisory services to individuals and businesses, and allegedly crossing the line into tax avoidance territory.

Wiese’s Titan Group would go on to buy a South African subsidiary of Tullow, which puts it on the hook for what could be a large outstanding tax debt.

SARS first set out its claim in 2013 and Wiese has denied any wrongdoing from the get-go.

The merits of whether Wiese and colleagues owe the tax debt to SARS have not yet been argued in court.

The two sides first agreed that some points of tax law needed to be clarified. While the points are highly technical, they are expected to play a vital role when the main case kicks off.

The first question concerns whether a tax debt can be said to exist even if SARS has made no assessment yet.

The argument put forward by Wiese and his colleagues is that they can’t be held accountable for a tax debt that SARS hadn’t told them existed. He argued that a tax debt becomes due only once an assessment has been made SARS.

That was essentially rejected by the Western Cape High Court, which ruled in favour of SARS.

Again, it’s all very technical and Wiese says he and his colleagues had taken the ruling on appeal. That’s unlikely to succeed, according to tax law experts, but does mean the next step in the trial may be somewhat delayed.

Maybe Wiese should ask Markus Jooste if he can cover that alleged tax debt because he sure owes his former mentor a favour.

[source:news24]