{"id":44164,"date":"2023-02-08T18:03:52","date_gmt":"2023-02-08T18:03:52","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill"},"modified":"2023-02-08T18:14:30","modified_gmt":"2023-02-08T18:14:30","slug":"coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill","title":{"rendered":"Coronation bleeds after court rules it must pay large tax bill"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Coronation lost almost a billion rand in market value within an hour on Wednesday after the Supreme Court of Appeal (SCA) ordered it to pay a large tax bill.<\/p>\n

Given the ruling, the company said it may not pay an interim dividend.<\/p>\n

Coronation and the South African Revenue Service (SARS) have been at loggerheads about whether the profits of Coronation’s business in Ireland – Coronation Global Fund Managers (CGFM) – should be included in the taxable income of its South African holding company.<\/p>\n

If the primary operations of CGFM are conducted in Ireland, a tax exemption applies.<\/p>\n

But SARS found that this was not the case, and that the exemption does not apply. Accordingly, it included the entire profit of CGFM in Coronation’s local tax bill.<\/p>\n

Coronation objected to SARS’ assessment and took the matter to the tax court. The tax court in Cape Town agreed with Coronation, and set aside the SARS assessment.<\/p>\n

Last year, SARS took the judgment on appeal to the SCA, which had to decide whether the Irish business qualifies for the tax exemption.<\/p>\n

“Of particular significance is that CGFM has adopted an outsource business model and the attendant ramifications that may have for its tax status,” the SCA said in its ruling.<\/p>\n

CGFM outsourced its investment management to Coronation Asset Managers and Coronation International, neither of whom was a tax resident in Ireland.<\/p>\n

To SARS, this model didn’t qualify CGFM as a business with “primary operations” in Ireland. It said the company’s Dublin office was not suitably staffed with employees, nor suitably equipped to prove that it conducted “the primary operations” of the business.<\/p>\n

But Coronation argued that it didn’t merely exist on paper. Outsourcing was a commercial reality there, with approximately 70% to 80% of the businesses operating on an outsourcing basis.<\/p>\n

It said that while it did not have sufficient staff to conduct investment trading in Ireland, it had enough staff to maintain its licence in that European country.<\/p>\n

On Tuesday, the SCA ruled in SARS’s favour and ruled that Coronation must pay tax on the profits earned by its international operations, together with interest and costs. The SCA, however, dismissed SARS’s claim for penalties.<\/p>\n

In a statement on Wednesday afternoon, Coronation said it is still “quantifying the exact financial impact of the ruling”.<\/p>\n

“Given the material impact on earnings and cash flows, the company does not anticipate declaring an interim dividend.”<\/p>\n

The company is considering taking the matter on appeal in the Constitutional Court.<\/p>\n

By early afternoon, Coronation’s share price was down 11.5%, trading at R31.64. A year ago, its shares were trading above R50.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Coronation lost almost a billion rand in market value within an hour on Wednesday after the Supreme Court of Appeal (SCA) ordered it to pay a large tax bill. Given the ruling, the company said it may not pay an interim dividend. Coronation and the South African Revenue Service (SARS) have been […]<\/p>\n","protected":false},"author":84,"featured_media":44163,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,4531,1151,275],"class_list":["post-44164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-coronation","tag-sars","tag-south-africa-2"],"yoast_head":"\nCoronation bleeds after court rules it must pay large tax bill - South Africa<\/title>\n<meta name=\"description\" content=\"Coronation lost almost a billion rand in market value within an hour on Wednesday after the Supreme Court of Appeal (SCA ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Coronation bleeds after court rules it must pay large tax bill\" \/>\n<meta property=\"og:description\" content=\"Coronation lost almost a billion rand in market value within an hour on Wednesday after the Supreme Court of Appeal (SCA ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-02-08T18:03:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-02-08T18:14:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/02\/postQueueImg_1675866839.54.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Coronation bleeds after court rules it must pay large tax bill\",\"datePublished\":\"2023-02-08T18:03:52+00:00\",\"dateModified\":\"2023-02-08T18:14:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill\"},\"wordCount\":461,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/02\/postQueueImg_1675866839.54.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"coronation\",\"sars\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/coronation-bleeds-after-court-rules-it-must-pay-large-tax-bill\",\"name\":\"Coronation bleeds after court rules it must pay large tax bill - 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