The most recent major tax avoidance case is the Absa Bank Ltd & United Towers v SARS Constitutional Court judgment delivered on 22 April 2026.
This is the most current and significant tax avoidance ruling in South Africa.
What the Court decided
- Ignorance is not a defence against the application of the General Anti-Avoidance Rule (GAAR).
- A taxpayer cannot claim they didn’t know about certain steps in a tax avoidance structure if they knowingly participated in the overall arrangement.
- SARS was correct to treat the structure as an impermissible avoidance arrangement.
Why SARS attacked the structure
The arrangement—designed by Macquarie—converted what should have been taxable interest income into tax free dividends through a multi entity, circular flow involving:
- PSIC3
- PSIC4
- Delta 1 Finance Trust
- Brazilian government bonds
- Macquarie Securities SA
The effect: ZAR 1.9 billion was invested in preference shares, and the resulting income was structured to appear as tax-exempt dividends.
Outcome
- SARS recharacterised the dividends as normal taxable income.
- The Constitutional Court upheld SARS’s position.
- The ruling strengthens SARS’s hand in attacking complex avoidance schemes.