The BMW SA (Pty) Ltd V Commissioner of Sars Case

Abstract Book of the 10th International Conference on Research in Business, Management and Finance

Year: 2026

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The BMW SA (Pty) Ltd V Commissioner of Sars Case

Dr. Busisani Sibiya, Ms Unathi Mjekula

ABSTRACT:

This paper follows the increasing popularity of employers providing tax assistance services to expat employees and the potential implications this has on the tax treatment of fringe benefits by various tax jurisdictions. In the BMW SA (Pty) Ltd v Commissioner for the South African Revenue Service case (BMW case), a BMW employee seconded to South Africa was assisted by South African tax experts in completing and submitting their tax returns, a service which SARS perceived as a fringe benefit and thus taxable. BMW SA, on the other hand, argued that the service was not a fringe benefit and not taxable. After a decade, having been through several South African courts, the case was eventually concluded.
An in-depth literature review of qualitative data was applied in this paper to examine the tax treatment of fringe benefits resulting from employers paying for tax compliance expenses on behalf of their employees in South Africa versus Australia.
In each of the jurisdictions, the definition of fringe benefit or benefit kind and the various fringe benefits provided by employers to employees as detailed in the tax legislation are considered. Focus is given to the employer’s responsibility, liability and tax treatment (where applicable) associated with the benefit resulting from employers paying for tax compliance expenses on behalf of their employees in South Africa in both tax jurisdictions. The paper concludes by assessing how Australia would have approached the same case and whether South Africa can learn anything from Australia.

Keywords: Fringe Benefit, Income Tax Act, Tax Relief