Sasol Oil wins appeal against Tax Court, it won't have to pay R1.3bn to SARS

Sasol Oil has won an appeal lodged with the Supreme Court of Appeal, over a ruling which required the oil company to pay R1.3bn to the South African Revenue Service. 

The group on Friday issued a notice to shareholders indicating that the SCA upheld its appeal against the Tax Court of Johannesburg's ruling in favour of SARS on June 30, 2017. The litigation concerns international crude oil procurement activities for the 2005 to 2007 years of assessment.

As a result of the Tax Court ruling, Sasol Oil made a provision in its 2018 annual financial statements of R1.3bn. After its appeal was upheld on Friday, it won't have to pay this amount to the tax agency, however. 

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"SARS argued that on the basis of the substance over form doctrine, some crude oil procurement contracts between Sasol Oil and other Sasol companies should be disregarded for tax purposes leading to a higher tax liability for Sasol Oil," Sasol's head of group media relations Alex Anderson explained in a statement on Friday. 

Sasol Oil subsequently lodged an appeal with the SCA. "On 9 November 2018, the Supreme Court of Appeal decided in favour of Sasol Oil and set aside the ruling by the Tax Court," Anderson said.

Sasol Oil will reverse the accrual of R1.3bn, the shareholder notice stated.

"Sasol Oil will approach SARS regarding other ongoing tax disputes closely linked to the principles and ruling set out above, with the objective of constructively resolving such disputes," Anderson added. 

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