3 - Specific Transactions (2)

Question 1

which services constitute financial services?

Answer 1

• exchange of currency
• issue of cheque, tradable liability, etc
• provision of credit + interest
• long-term insurance policies (not linked to possessions)
• provident/pension fund
• crypto
• derivatives/options
  (some may not be exempt if they attract comm/fee)

Question 2

how does the residential accommodation exemption work?

Answer 2

• any g/s acquired to supply residential acc, no input tax can be claimed and no output tax is charged

Question 3

what is the definition of residential accommodation?

Answer 3

• a dwelling that is leased
• lodging or board & lodging supplied by employer to employee as an employment benefit
• lodging or board & lodging supplied by employer to employee that operates a hostel that is mainly for employees

Question 4

what is the definition of a dwelling?

Answer 4

building used predominantly as a place of residence for a natural person and includes the fixtures thereof

Question 5

what is commercial accommodation?

Answer 5

• lodging or board & lodging which includes domestic g/s (cleaning, w&e) that excludes a dwelling
• hospice
• home for aged, children, mentally ill

Question 6

which two sections contain info about exported services?

Answer 6

• s11(2)(k)

- s11(2)(l)

Question 7

how do exported services work?

Answer 7

the company supplies exported services and there will be output tax at 0%

Question 8

what does s11(2)(k) say?

Answer 8

services which are rendered somewhere other than SA are zero-rated

Question 9

when are services supplied to a non-resident zero-rated?

Answer 9

when the non-res is not in SA and the services are in connection with land/movable property outside SA

Question 10

when are services supplied to a non-resident NOT zero-rated?

Answer 10

• if non-res was in SA at time of rendering

- if non-res is not in SA, but the services are in connection with land/movables in SA

Question 11

what does export service case law say about surrendering a right?

Answer 11

• it constitutes a services, so the early ending of a trade agreement is a service
• the right is situated where the debtor resides

Question 12

what does export service case law say about movable property?

Answer 12

movable property in the second proviso must be separate from, but still connected to, services rendered

Question 13

what does export service case law say about the provisos?

Answer 13

all three must be considered independently; if one is met, it means the services are consumed in SA and are thus not export services

Question 14

what is an exported good?

Answer 14

a good which is not consumed within the borders of SA

Question 15

what is a municipal rate?

Answer 15

a rate charged by the municipality to the owner of a property. does not include the owner charging the tenant a rate.

Question 16

when is something not a municipal rate?

Answer 16

• a single charge that does not contain separable charges

- water, electricity, gas, drainage, waste removal

Question 17

what are non-supplies?

Answer 17

they are transactions which are deemed not to be supplies and will thus not have output tax

Question 18

which items will be considered non-supplies?

Answer 18

• items which are input tax denied; will be a non-supplies when we dispose of them
• purchasing a good for exempt supplies; will be non-supply on disposal

Question 19

what are the overall case law applied to export g/s?

Answer 19

• moveable property must be separate from but still connected to export services
• consider the provisos independently
• surrendering a right/ending a contract early is a service
• incorporeal right is situated where debtor resides