The answer to this query is based on legislation
client has a subsidiary company with a fishing vessel.
They rent fishing permits from fishing rights holders. SARS has audited the
company in June 2013 and rejected the diesel rebate because the act states
that you can only claim a diesel rebate if your fishing permit is issued in
the name of the permit holder.
purchases are only applicable in respect of fishing
vessels -(A) which are owned or chartered by a
legal person registered in the Republic in accordance with the laws of the
Republic and which has its place of effective management in the Republic, or
by a natural person who is ordinarily resident in the Republic;(B) which are
registered or licensed in terms of the Merchant Shipping Act, 1951 (Act No.
57 of 1951);(C) that are nominated on a valid
commercial fishing permit issued by the Department
of Agriculture, Forestry and Fisheries in terms of the Marine Living
Resources Act. 1998 (Act No. 18 of 1998);(D) which are used in fishing
activities carried on with the aim of making a profit; and (E) if used in an
engine for the propulsion of, or operating of any equipment used on board, of
such fishing vessels"
It is my understanding
that SARS is correct in their application. You may however consider par (C)
and investigate as to what a nomination for such a permit may entail for
purposes of the Department of Agriculture, Forestry and Fisheries.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.