BMW loses appeal against Sars findings over employees' tax obligations | Cape Times

“In terms of their tax equalisation policy, they will have to bear the additional tax burden on behalf of the expatriate employees.'

10.9.2019

German automobile giant BMW has lost in the Supreme Court of Appeal against findings relating to individual tax obligations of its employees. CapeTimesSA

“In terms of their tax equalisation policy, they will have to bear the additional tax burden on behalf of the expatriate employees.'

Additional costs are incurred by the expatriate employees, as a result of the group requiring them to work in foreign countries. The employment relationship between the expatriate employees and the group operates on an agreed "tax equalisation" basis, the SCA judgment read.

According to the judgment, the SA Revenue Service (Sars) had in 2009 queried why payments to the firms did not constitute a taxable fringe benefit, in respect of which each expatriate employee would be liable. In Sars’ view the payments to the tax consultants by BMW SA constituted such a benefit.

BMW SA, in turn, lodged an appeal against the assessment that was heard in the tax court. The tax court dismissed the appeal by BMW SA and made no order as to costs.

“In terms of their tax equalisation policy, they will have to bear the additional tax burden on behalf of the expatriate employees.

Sars did not respond to requests for comment by deadline.

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