One of the great things about Interpretation Notes issued by the South African Revenue Service (SARS) is that while they do not supersede legislation, they give taxpayers and practitioners alike a very good indication of how SARS is likely to approach a particular transaction or series of transactions. In theory, this means that if one follows the guidelines contained in such an Interpretation Note, SARS will most likely see things the same way.
In this month's issue we also look at an interesting court case that sheds light on whether or not a compensation award is taxable; another case where the court overrides the contents of a SARS Interpretation Note; as well as the link between services rendered and income earned that renders such income taxable.
Taxpayers and their practitioners who place reliance on SARS Interpretation Notes, be warned: Courts can override these where the letter of the law seems clear. SARS is also not above challenging their own interpretation, either..