Category: VAT

Author: Diane Seccombe (Mazars)  South African VAT vendors involved in the export of goods will warmly welcome new VAT regulations, which became effective on the 2nd of May 2014. South African legislation seeks to increase exports by incentivising exporters in many forms, and the Value-Added Tax Act (the Vat Act) is no exception. Where goods have been “exported” (as defined in section 1 of the Vat Act) by a vendor the supply is regarded as zero rated. A zero rated supply is beneficial as, despite

The fundamental governing principle of value-added tax (VAT) is that it is levied on the supply of goods and services by a vendor, and that the vendor can claim input tax in respect of goods and services received. It can be difficult enough dealing with the administrative aspects of VAT and determining the correct VAT treatment of transactions – imagine the additional frustration created when the South African Revenue Service (SARS)

Author: Carmen Moss-Holdstock (CliffeDekkerHofmeyr) Background  The Value-Added Tax (VAT) rules relating to the exportation of goods are rather complex and intricate. Many vendors do not always appreciate the issues that arise in circumstances where goods are exported, either by the vendor or the purchaser of the goods.

Author: Varusha Moodaley VAT vendors who make taxable supplies of goods or services are obliged to issue tax invoices to the recipients of such supplies within 21 days of having made such a supply. A valid tax invoice is of utmost importance because without such a document a vendor, being the recipient of a supply, is not entitled to claim any input tax deductions in respect of goods or services acquired in the course or furtherance of making taxable supplies.

By Anton Kriel, Tax Partner Grant Thornton Cape The VAT Input Claw Back In the ordinary course of business, creditors often reduce or write-off bad and irrecoverable debts. For the creditors, the VAT treatment is simple. If output VAT on the written-off debts was accounted for, the creditor is entitled to claim the VAT portion of the written-off debt as input VAT. However, for the debtor the solution is not as simple, and it could give rise to additional liability. In fact, the debtor may just be trading one creditor for another and the another being SARS.

For a transaction in South Africa to attract value-added tax (VAT), there should be a supply of goods or services by a vendor in the course or furtherance of an enterprise. Consider the following scenario: A and B, both vendors for VAT purposes, have a business arrangement whereby, for example, B provides consulting and management services to A. It transpires, in the course of their business arrangement, that A requires the use of a rented vehicle. B agrees to arrange for the vehicle. B enters into a rental agreement with C, also a VAT vendor, and the vehicle is made available for the benefit of A. C subsequently invoices B for R100 plus VAT of R14 and B pays C the R114. Naturally, B seeks to recover the cost from A. B does not wish to recover anything in excess of the cost from A because A is a good Read More …

For a transaction in South Africa to attract value-added tax (VAT), there should be a supply of goods or services by a vendor in the course or furtherance of an enterprise. Consider the following scenario: A and B, both vendors for VAT purposes, have a business arrangement whereby, for example, B provides consulting and management services to A. It transpires, in the course of their business arrangement, that A requires the use of a rented vehicle. B agrees to arrange for the vehicle.

By Cliff Watson, Associate Tax Director, Grant Thornton Johannesburg The VAT Act was recently amended and changed the VAT implications of residential property levies paid to Home Owners Associations (HOAs). The history People living in residential complexes managed by sectional title body corporates were generally not required to pay VAT on the levies paid, as the services rendered by these body corporates to their members were generally exempted from VAT.