Fertiliser and chemicals group Omnia may soon head to the Tax Court if it fails to reach an agreement with SARS, which launched a tax dispute of nearly R1bn against the company that has now dragged on for two years, reports Moneyweb.

The company, which lodged an appeal against the tax dispute, said its advisers believe any resolution would most likely be substantially less than the additional tax liability assessed by the revenue service.

It said if an agreement can’t be reached, the matter will proceed to the Tax Court.

In June 2021, the company revealed that it became subject to a tax audit by SARS for transfer pricing pertaining to the 2014 to 2016 assessment years.

The audit resulted in SARS indicating a possible upward adjustment to taxable income for those three years, leading to a hefty liability.

Delivering its full-year results for the period to the end of March 2023 on Monday, the company said while it disagrees with SARS findings, its tax liability had been reduced after it objected to its assessments.

Following the objection, SARS issued revised assessments, with the additional tax liability reduced to R414m from R415m and understatement penalties to R135m from R165m.

However, the revised assessments continue to attract interest on a monthly basis, which had accrued to R389m as at 31 March, said Omnia.

As a result, Omnia said it lodged an appeal against the revised assessments and indicated its willingness to partake in an Alternative Dispute Resolution process, which it deems the most likely mechanism for reaching a resolution.

Omnia CEO Seelan Gobalsamy said in an interview on SAfm Market Update that what the company certainly doesn’t want to do is end up paying an amount it believes is not due.

Full Moneyweb report