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Sars doesn’t owe model Candice van der Merwe a R44 million refund on a politician’s gift, Supreme Court rules

Business Insider SA

  • The SA Revenue Service has won a legal battle against swimsuit model Candice van der Merwe, and won't have to repay her R44 million.
  • Van der Merwe had paid that money in settlement of a dispute about tax on a R142.9 million gift she received from former Lebanese prime minister Saad Hariri.
  • The high court said a tax court should not have rejected her attempt to get the money back, but the SCA disagreed.
  • For more stories go to www.BusinessInsider.co.za.

The SA Revenue Service (Sars) won't have to repay swimsuit model Candice van der Merwe her R44 million tax settlement on a huge gift.

The Supreme Court of Appeal (SCA) on Thursday upheld an appeal by the tax service against an October 2020 high court decision, which had overturned an earlier ruling by the tax court against Van der Merwe.

That brings to an end a long-running legal dispute about a huge "donation" Van der Merwe had received after meeting a politician on a tropical island. 

In the 2014 tax year, Van der Merwe told Sars she had earned R365,919, an average of just over R30,000 per month. Her tax bill came to R13,807.

But her tax return contained a rather extraordinary disclosure: a "gift from her companion abroad" worth R142.9 million. In her later legal battles, she disclosed that money had come from the now former Lebanese prime minister Saad Hariri. They had met at The Plantation club and resort in the Seychelles in 2012, when she was 20 and Hariri 43, said Van der Merwe.

Van der Merwe had been on a sponsored trip, there to add glamour to the resort, she said. Hariri, a father of three and married at the time, was one of the guests there to enjoy such glamour.

Hariri's fortune came from the construction company founded by his father, Saudi Oger, which was an original shareholder in Cell C. It collapsed in 2017.

See also | Thanks to a five-year tax battle we found out who gifted a SA model R150 million: Lebanon’s prime minister


Sars' approach that the Hariri gift was not subject to tax did not last. By February 2015 it seemed to be starting to form the opinion that the money had been closer to a payment for services rendered, and by December of that year, Van der Merwe's lawyers agreed, in part. They suggested that R110.3 million of the money be treated as taxable income, and that Van der Merwe pays what was later set at R44,175,675.

Should Hariri choose to pay that tax bill on her behalf – and so bring his total gifts to her closer to R200 million – she would not be taxed on that fresh donation, Sars told Van der Merwe's lawyers.

In March 2016, the last of the paperwork was finished off, and Sars had its R44 million while Van der Merwe's tax record was clear.

But exactly 30 months later, in September 2018, Van der Merwe apparently changed her mind, trying "to reverse what her attorneys had plainly agreed on her behalf," said the Supreme Court of Appeal, by filing an objection on the Sars eFiling system.

She had not intended to make the payment as a settlement, said Van der Merwe, but had paid the money in terms of the "pay now, argue later" rule – and now she was arguing.

By mid 2019, the argument was before the tax court, which found Van der Merwe never lodged a valid objection. She appealed to the high court, and won, but that judgment had some "regrettable" features, said the SCA, including that it never actually set aside the order of the tax court. 

The high court was fundamentally wrong, said the SCA in its unanimous judgment: it should have dismissed Van der Merwe's appeal as invalid, and so ended her quest to get her money back. 

The SCA also slapped Van der Merwe with costs for both the high court and SCA matters.

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