Editorial

• Jurisdiction: South Africa
• DOI: 10.10520/ejc-btclq_v16_n3_a1
• Author: Blumberg SC Matthew
• Pages: v-v
• Date: 01 November 2025
• Published date: 01 November 2025
• Published By: Siber Ink

2025 16(3 ) BTCLQ Editorial

Editorial

MATTHEW BLUMBERG SC

It may be a platitude to say th at company and ta x law are esoteric fields

with exoteric implications, but I will lead with it nonetheless: the three

articles in this edition neatly illustrate how the answers to technical and

abstruse legal questions can have broad 'real world' implications.

The first article - by co-authors Prof Des Kruger and J oon Chong of

Webber Wentzel - considers the VAT implications of expenditure on corpo

rate activity tha t is not directly linked to the company's core operations,

for example capital-raising fees, advisory fees in relation to mergers, acquisi

tions and takeover bids, and other high-level strategic expenditure. Is the

VAT portion of expenditure of that nature deductible as 'input tax'? The

article tackles this question with reference to the case law, tracing the marked

evolution of our VAT jurisprudence from the Supreme Court of Appeal's

2012 judgment in CSARS v De Beers1 (applying a narrow and rigid 'direct

and immediate link' test) to the same court's recen t judgment in CSARS v

Woolworths2 (applying a flexible and more holistic 'functional link' test).

The article goes on to provide practical guidance for holding companies

wishing to avoid VAT leakage (i e, in curring expenditure on which the VAT

portion is no t deductible) by bringing themselves within the SCA's more

permissive approach in Woolworths.

Just as the Woolworths judgme nt should come as something of a relief

to the corporate business world, the article's clarity of reasoni ng should

come as a relief to any practi tioner that has had to grapple with the often

complex questions presented by input tax deductibility in the context of

strategic corporate-level expenditure.

The second article - by previous contributor Siyabonga Nyezi - concerns

directors' duties in company law. The article's premise is that directors,

unlike the corporate entities to whom they owe duties, are human. They

make mistakes. Where th e mistake is, to paraphrase, the result of the

director having acted in reasonable reliance on information, reports, state

ments and the like prepared by other individuals (employees, delegates

of the board, external advisors and the like), the d irector is absolved from

liability under section 7 7 of the Companies Act.

1 Commi ssioner for South African Revenue Services v De Beers Cons olidated Mines Ltd

(50 3/1 1) [ 2012] ZASCA 103 ; 2 01 2 (5) SA 34 4 (SCA); [201 2] 3 All SA 3 67 (SCA); 74

SATC 3 30 (1 Ju ne 20 12) .

2 Comm issioner for South A frican Revenue Service v Woolw orths Hol dings L imited

(8 63/ 202 3) [2 025] ZASCA 99 (4 July 20 25) .

© Juta and Compan y (Pty) Ltd v