The Constitutional Court on Friday ruled in Coronation Fund Managers' favour in its almost R800m tax dispute with SARS.

Fin24 reports that the apex court set aside a February ruling by the SCA that it was liable for almost R1bn in tax related to a protracted dispute with SARS.

‘Coronation welcomes the judgment of the Constitutional Court, which confirms that CIMSA's (Coronation Investment Management SA) interpretation and application of the relevant tax legislation has been correct and appropriate,’ the asset manager said in its stock exchange filing on Friday. 

CIMSA is the name of the group's holding company and its locally registered tax entity.

‘Shareholders are advised that caution is no longer required to be exercised when dealing in the company's securities,’ Coronation added.

The Constitutional Court victory means Coronation shareholders could be in line for a windfall, as the company had already paid over and provided for the tax liability, which as at end-March amounted to R794m. 

Coronation's tax dispute with SARS dates back to 2012, and centred on whether the profits of its Irish business – Coronation Global Fund Managers (CGFM) – should be included in the taxable income of its SA holding company (CIMSA).

SARS initially notified the group of the alleged tax liability in 2017, saying profit earned by its Irish business should have been included in the taxable income of CIMSA.

The Constitutional Court ruling means SARS will now have to pay back any tax money related to the dispute, while any money provisioned for to cover the remaining disputed amounts can now be released as available cash.

Full Fin24 report

Judgment