How Have the Courts Decided What De Minimis is in Tax Law?

Abstract

This article analyses how South African courts have decided the applicability of the de minimis non curat lex maxim and, more broadly, considered the de minimis concept in tax law. A doctrinal research methodology is employed with the focus on an analysis of predominantly reported judicial decisions. The applicability of the maxim is found to be decisive in only one tax case: the Diageo SA (Pty) Ltd v Commissioner for the South African Revenue Service case of 5 July 2023. Consequently, this study thus also reviews judicial precedent in respect of the applicability of the maxim in other areas of the law with consideration of the relevance to tax law. Further, several tax cases that refer to the broader de minimis concept or to trivial or trifling matters are examined. As there is no one definitive test to determine the applicability of the maxim, the courts have used several factors to guide their determination. Through inductive reasoning, the following conclusions are drawn. (i) In respect of statutory interpretation: First, the primary factor in the determination of the applicability of the maxim is the purpose of the provision. This is aptly demonstrated in the Diageo judgment. Secondly, where the statute sets a clear, objectively verifiable limit or amount, there is essentially no room for the application of the maxim in interpreting the statute. Where, however, no such verifiable basis is provided, a purposive interpretation is paramount – which may in fact require the application of the maxim. (ii) The use of the de minimis concept in tax law appears to depend on whether the matter is one of principle (substance) or practicality (administrability). In the former case, the amount (the factor of extent or value) is irrelevant whereas in the latter, the de minimis concept has been applied.