Publications
Partners
SA's biggest digital bank, Capitec, has scored a victory against the South African Revenue Service (SARS) in a long-standing VAT dispute.
The Constitutional Court found in favour of the Stellenbosch-headquartered lender after it appealed against a 2022 ruling by the Supreme Court of Appeal (SCA) that denied Capitec's R71.5 million VAT claim dating back to 2017. SARS did not accept Capitec's claim for a R71.5-million tax deduction when it filed its VAT return in November 2017 and also levied a late payment penalty on the bank.
Capitec had claimed a deduction on money paid out to clients under a loan cover scheme that settled customers' outstanding loan obligations in the event of death or retrenchment. The bank made the claim on the basis that the VAT Act allows vendors to deduct an amount equal to the tax fraction of any payment made by it to indemnify another party in terms of any contract of insurance.
