Mayet & Associates Inc. | Commercial Law | South Africa

The past two months have produced a compact but consequential set of tax and customs developments in South Africa. Three High Court judgments have sharpened the rules on when a taxpayer can enforce a favourable order while SARS appeals, and on what “urgency” really means in a customs dispute. SARS has reissued its guidance on documentary proof for zero-rated supplies and formally launched its Advance Pricing Agreement programme. A cluster of tariff amendments has moved duties on fasteners, peanut butter, rock drilling equipment parts and hot-rolled steel. Internationally, the OECD has published its first hard data on the Global Minimum Tax in operation.

Below we set out what happened, what it means, and where the practical exposure lies, with particular attention to businesses trading across the South Africa–Lesotho corridor.

1. Enforcing a judgment while SARS appeals: the Ocean Ark Shipping litigation

Two judgments of the Western Cape High Court, roughly a month apart, deal with the same underlying problem: a taxpayer wins, SARS appeals, and the taxpayer wants the order to operate in the meantime.

1.1 Ocean Ark Shipping Ltd and Another v Commissioner for SARS (2025/209746) [2026] ZAWCHC 330 (8 June 2026)

SARS applied for leave to appeal against a judgment and order of the High Court. The applicants responded with a conditional application under section 18(1), read with section 18(3), of the Superior Courts Act 10 of 2013, seeking an order that the judgment not be suspended pending the appeal.

The Court had to decide two questions: whether the interim order was appealable at all, and whether the applicants had discharged the section 18(3) onus of showing that SARS would not suffer irreparable harm if execution were permitted.

The Court held that the order was appealable, granted SARS leave to appeal, and refused the section 18(3) application on the basis that the applicants had failed to prove the absence of irreparable harm to the Commissioner.

1.2 Ocean Ark Shipping Ltd and Another v Commissioner for SARS (2025-209746) [2026] ZAWCHC 354 (6 July 2026)

The applicants then sought leave to appeal the refusal of the execution order, pending SARS’ appeal to the Supreme Court of Appeal.

The Court held that the refusal of section 18 relief is not ordinarily an appealable “judgment or order” for the purposes of section 16(1)(a) of the Superior Courts Act. Leave to appeal was refused with costs.

1.3 Why this matters

The asymmetry in section 18 is easy to miss and expensive to discover late. Where a court grants execution pending appeal, the statute provides an expedited and automatic route to challenge that decision. Where a court refuses execution, no equivalent statutory route exists, the disappointed applicant is thrown back on the ordinary appealability requirements, and a refusal will generally not meet them.

The practical consequences for a taxpayer are:

• The section 18(3) onus is a real one, and it is yours. It is not enough to show that you will suffer prejudice from a suspension. You must prove, on a balance of probabilities, both that you will suffer irreparable harm and that the Commissioner will not. In a fiscal dispute, where SARS can point to the revenue collection interest and the risk of irrecoverability, the second leg is frequently where these applications fail.
• A refusal is, in practical terms, close to final. If the execution application fails, there is unlikely to be a second bite. That reality should be priced into the decision whether to bring the application at all, and into how thoroughly the founding affidavit deals with the Commissioner’s position, not merely your own.
• Evidence about SARS’ position must be led affirmatively. Bare assertions that “the Commissioner cannot be prejudiced because the amount is secured” or “SARS can always recover later” will not do the work. Where possible, deal concretely with security, solvency, quantum and the reversibility of the relief.

For businesses whose cash flow depends on the operation of a favourable order, released goods, refunded VAT, suspended assessments, the planning must start before the order is granted, not after the notice of appeal arrives.

2. Urgency, self-created: Reload Aquarius Shipping International (Pty) Ltd v Commissioner for SARS (149944/26) [2026] ZAGPPHC (21 July 2026)

The applicant approached the Gauteng High Court on an urgent basis, seeking condonation for non-compliance with section 96 of the Customs and Excise Act 91 of 1964, the provision requiring prior written notice to the Commissioner before proceedings are instituted.

The Court struck the matter from the roll with costs. Two findings drove the outcome:

1. An alternative remedy was immediately available. As a licensee of a customs warehouse, the applicant had a straightforward obligation under the Customs and Excise Act which it could have discharged at once, namely, to increase its security bond.
2. The urgency was self-created. The applicant had failed to furnish the Commissioner with information and documents requested of it, and had failed to submit the application to have the security value increased.

Why this matters

This judgment is a reminder that the customs regime is heavily front-loaded with compliance obligations, and that courts will not treat the consequences of ignoring those obligations as an emergency of the Commissioner’s making.

Three points for licensees and clearing agents:

• Answer SARS’ information requests, in writing and on time. A documented record of engagement is the difference between a genuine dispute and an application struck from the roll.
• Where the statute gives you a route, take it. Security bond adjustments, applications for extensions, and internal remedies must be exhausted or at least invoked. A court will ask why you did not simply do the thing the Act required.
• Section 96 is not a formality. The one-month notice requirement is a substantive gatekeeper. Condonation is available, but it is discretionary and is not granted to reward inaction.

3. SARS publications

3.1 Interpretation Note 31 (Issue 5) Documentary Proof Required for the Zero-Rating of Goods or Services

SARS has published Issue 5 of Interpretation Note 31, which sets out the documentary proof the Commissioner will accept as contemplated in section 11(3) of the Value-Added Tax Act 89 of 1991 where goods or services are supplied at the zero rate.

This is essential reading for exporters. The zero rate is a substantial cash-flow advantage, but it is conditional: where the prescribed documentation is not obtained and retained within the prescribed period, the supply reverts to the standard rate and the vendor carries the VAT. For businesses exporting from South Africa into Lesotho and the wider SACU and SADC region, the practical risk is rarely the legal entitlement to zero-rate, it is the file. Vendors should re-test their export documentation packs, their retention practices and their internal sign-off controls against Issue 5 rather than against whichever earlier issue their procedures were built on.

3.2 The Advance Pricing Agreement programme

SARS has launched a dedicated webpage, “Implementation of Advance Pricing Agreements (APAs)”, as part of the ongoing rollout of South Africa’s APA programme. The page sets out the programme’s overview, objectives, expected benefits and planned pilot approach.

An APA is an agreement concluded in advance between a taxpayer and the revenue authority on the transfer pricing methodology to be applied to specified cross-border related-party transactions over a set period. The purpose is upfront certainty, replacing the risk of a transfer pricing adjustment years after the fact with an agreed position going in.

For groups operating on both sides of the South Africa Lesotho border, this is a development to watch closely. Intra-group management fees, royalties, loan funding, procurement arrangements and shared services between a South African parent and a Lesotho operating entity are precisely the transactions that attract transfer pricing scrutiny. The programme begins as a pilot, so capacity will be limited and admission criteria will matter; groups with material cross-border related-party flows should be assessing now whether they are candidates.

4. Customs and excise: tariff amendments

A significant batch of tariff amendments was published in the review period.

Notice	Schedule	Effect
R.7733	Part 3 of Schedule No. 2	Substitution of safeguard items 260.03/7318.15.41/01.08, 260.03/7318.15.42/01.08 and 260.03/7318.16.30/01.08 safeguard duty amended to 38,04% on threaded fasteners of iron or steel (excluding stainless steel and those identifiable for aircraft), ITAC Report 780
R.7734	Part 3 of Schedule No. 2	Substitution of the same safeguard items, safeguard duties extended at a rate of 42,04% on the same threaded fasteners, ITAC Report 780
R.7735	Part 3 of Schedule No. 2	Substitution of the same safeguard items, safeguard duty amended to 40,04% on the same threaded fasteners, ITAC Report 780
R.7739	Part 1 of Schedule No. 1	Substitution of tariff subheadings 2008.11.11, 2008.11.15 and 2008.11.19, general rate of customs duty on peanut butter increased from 0,99c/kg to 20%, ITAC Report 652
R.7740	Part 1 of Schedule No. 1	Substitution of tariff subheading 8467.99.90, general rate of customs duty on rock drilling equipment parts increased from free of duty to 20%, ITAC Report 774
R.7741	Part 3 of Schedule No. 2	Substitution of various items under item 260.03, listing rebate items excluded from the 13% safeguard duty on certain hot-rolled steel products under Chapter 72, retrospectively from date of implementation, ITAC Revised Minute M02/2025

A note on the fastener notices. Notices R.7733, R.7734 and R.7735 substitute the same three safeguard items at three different rates. Read together with the extension referred to in R.7734, this is consistent with a phased safeguard schedule under which the rate steps down across the extended period. Importers should not assume a single applicable rate: check the commencement and effective dates in each notice against the date of entry for home consumption.

Two further points. First, the retrospective operation of R.7741 means that entries already made may need to be revisited, rebate positions that were unavailable at the time of clearance may now be available, and vice versa. Second, the peanut butter and rock drilling equipment amendments are steep increases from near-zero baselines, which will materially affect landed cost and any long-term supply contracts priced on the old rates.

The SACU dimension. South Africa’s Schedule No. 1 duties form part of the SACU common external tariff. Amendments of this kind are therefore not a South African concern alone, they carry consequences for importers in Lesotho, Botswana, Eswatini and Namibia bringing goods into the common customs area. Businesses importing into Lesotho from outside SACU should be reviewing these amendments alongside their South African counterparts, and should confirm the position with the Revenue Services Lesotho where classification or rebate treatment is in issue.

5. International: the Global Minimum Tax moves from theory to data

5.1 OECD 2026 Economic Impact Assessment of the Global Minimum Tax

The OECD has released its updated 2026 Economic Impact Assessment of the Global Minimum Tax, providing new estimates of the expected effects of the regime and, for the first time, preliminary evidence from its first year of implementation. The updated assessment incorporates more recent data, improved modelling and information on the current state of implementation, including the recently agreed Side-by-Side Package. It examines the expected effects on effective tax rates, tax rate differentials, profit shifting and tax revenues.

Alongside it, the OECD released Multinational Enterprises’ Responses to the Global Minimum Tax, based on 2024 consolidated financial statement data. The preliminary evidence suggests increases in effective tax rates among in-scope MNEs relative to out-of-scope firms, with no statistically significant evidence of reductions in investment or employment during the first year.

5.2 OECD Corporate Tax Statistics 2026

The OECD has also published the 2026 edition of Corporate Tax Statistics, its flagship publication on corporate income tax, providing comprehensive data on corporate taxation, MNE group activity and base erosion and profit shifting practices.

5.3 The regional angle

South Africa has legislated a domestic minimum top-up tax and an income inclusion rule for in-scope groups. The relevance for the corridor is direct: where a South African-headed group has operations in a jurisdiction taxing at a low effective rate, the shortfall may be collected as top-up tax at the parent level.

This deserves specific attention from groups with Lesotho operations. Lesotho’s preferential rate for manufacturing income sits materially below the 15% global minimum. That is, of course, exactly the incentive Lesotho intends to offer but for a group within the scope of the Global Minimum Tax, the benefit of that low rate may be substantially eroded by top-up tax collected elsewhere in the group. Groups approaching the consolidated revenue threshold should be modelling this now, before an incentive that was central to the investment case turns out to be worth less than it appears on the face of the Lesotho assessment.

What we suggest you do

1. If you are in dispute with SARS, decide early, ideally before judgment, whether you will need the order to operate pending appeal, and build the evidential record on irreparable harm to the Commissioner accordingly.
2. If you hold a customs warehouse licence or clearing accreditation, audit your responsiveness to SARS information requests and your security bond position. Self-created urgency is not urgency.
3. If you export at the zero rate, re-test your documentation pack against Interpretation Note 31 (Issue 5) rather than against your legacy procedures.
4. If you import fasteners, peanut butter, rock drilling equipment parts or hot-rolled steel, obtain a tariff determination or a written classification opinion and confirm the rate applicable at the date of entry.
5. If your group operates on both sides of the border, assess your transfer pricing exposure against the APA programme and model your Global Minimum Tax position, including the effect of Lesotho’s preferential rates.

How we can help

Mayet & Associates Inc. advises South African and Lesotho businesses on cross-border commercial, customs and regulatory matters from offices in Bloemfontein and Maseru. Our work includes tax and customs dispute strategy, urgent and review applications, correspondent attorney services before the Free State High Court and the Supreme Court of Appeal.

To discuss how any of the above affects your business, contact our offices.

This article is provided for general information only and does not constitute legal or tax advice. It reflects the position as at the date of publication and should not be relied upon without obtaining specific advice on your circumstances. Case summaries reflect the outcomes as reported and readers should consult the full judgments.