Income Tax Case No: Vat 45

• Jurisdiction: South Africa
• Judge: MacArthur J
• Judgment Date: 17 September 1997
• Citation: 1998 JDR 0474 (TSpCrt)
• Docket Number: VAT 45
• Court: Transvaal Income Tax Special Court

MacArthur J:

This is a matter involving the Value-Added Tax Act No. 89 of 1991 ("the Act") which provides for the imposition of Value-Added Tax ("VAT") on certain goods or services. The question is whether tickets sold abroad for certain sporting matches played in South Africa were subject to that tax.

1998 JDR 0474 p2

MacArthur J

The factual background to the problem which is derived from the evidence and the papers placed before us is in short the following. C, a South African entity which is the appellant in this matter entered into a written agreement in 1993 with two other companies, one being D which is a company registered overseas and the other being F, a company registered in yet another country. The latter company played no real part in this appeal it being concerned mainly with the exploitation of the commercial rights in respect of the tournament. The written agreement gave C the right to stage the tournament in South Africa and that right was of course subject to the terms and conditions of the Agreement. C was required inter alia to make all the necessary arrangements in South Africa for each of the matches and also the travel and accommodation arrangements. The gate money was to be received, retained and applied by C and after various deductions were made, the balance was to be divided between C and D. The allocation of tickets was a matter which fell under the aegis of D and although it agreed to consult with C its decision was final. D was entitled to specify for each match what its own ticket requirements were and it was responsible for the ticket distribution. Whatever tickets were not required were to be sent back in good time so that they could be disposed of in south Africa by C.

1998 JDR 0474 p3

MacArthur J

From the evidence it has been established that the tickets were printed by C and all the tickets of all the matches were kept by C in their offices at Johannesburg. Whatever tickets were allocated by D or requested by D they were neither dispatched nor delivered until the money had been received by C. This appears quite clearly in the Ticketing Policy booklet at p8 thereof where it is stated inter alia -

"all cheques will be cleared by banks before ticket distribution."

On these facts the ticket sales were concluded when the orders were accepted by C and plainly ownership thereof passed on delivery taking place.

The tickets contained information on the front thereof which gave, for example, the date and place of the match, the participants and the particular seat to be occupied. The price was also mentioned but there was no reference to VAT. On the reverse side of the ticket under...