Energy and chemicals group Sasol reported on Friday that it would reverse a R1.3-billion provision made in its 2018 annual financial statements after the Supreme Court of Appeal overturned an earlier adverse finding against Sasol Oil by the Tax Court.
Sasol Oil and the South African Revenue Service have been in a long-running dispute over Sasol Oil’s international crude oil procurement activities for the tax years covering the period 2005 to 2014.
On June 30, 2017, the Tax Court found in favour of SARS for the 2005 to 2007 assessment period, which led Sasol Oil to make a R1.3-billion provision, including penalties and interest, covering the 2005 to 2014 tax years.
However, Sasol Oil also filed an appeal against the judgment and, on November 9, the Supreme Court of Appeal decided to uphold its appeal.
“The court effectively confirmed Sasol Oil’s view that the grounds for additional taxation of Sasol Oil’s international crude oil procurement activities has not been fulfilled. On the basis of this judgment, Sasol Oil will reverse the accrual of R1.3-billion,” the company told shareholders in a statement.