The South African Revenue Service (SARS) is pursuing international sportswear manufacturer Adidas for R1.9 billion in customs duties for allegedly underpaying these duties from 2007 to 2013.
- Adidas has admitted to the dispute and the case will be heading to the High Court, although a court date has not yet been set.
- SARS claims that transactions between Adidas International and Adidas South Africa were “simulated” to reduce the amount of customs duties payable, while Adidas views its South African unit as the importer, leading to a discrepancy between the value of the goods imported according to SARS and the value ascribed to them by Adidas.
- Adidas has pushed back against the claim and intends to appeal against the ruling if it is in SARS’ favour, and has not raised any provisions for the payment of the claim as the company believes it will be successful in dismissing the payment claim.