6 - Imported Goods and Services

Question 1

when will output tax be charged on an imported service?

Answer 1

a non-resident supplier/resident supplier who carries on business outside SA supplies services to a resident and the services are used in SA for non-taxable supplies
» vendor pays output tax

Question 2

what are the exceptions to the imported services rule?

Answer 2

• taxable supply
• zero-rated or exempt supply
• educational services rendered by non-res at an export education institute
• supply from employee to employer
• supply with invoice amt < R100

Question 3

what is the time of supply for imported services?

Answer 3

earlier of invoice and payment

Question 4

what is the value of supply for imported services?

Answer 4

the greater of consideration and OMV

NO VAT INCLUDED IN THESE AMOUNTS; NON-RESIDENT DOES NOT CHARGE VAT

Question 5

what would happen if the vendor used the services for partly taxable and non-taxable supplies?

Answer 5

we apportion the output

Question 6

what do the case law principles for imported services say about financial services?

Answer 6

when a vendor borrows money, it is the recipient of financial services and it does not become the supplier

Question 7

what do the case law principles for imported services say about conventional loans?

Answer 7

does not constitute financial services as per the VAT act

Question 8

what do the case law principles for imported services say about taxable supplies?

Answer 8

we cannot assume that because a business makes only taxables, that the service will only be used for taxables. we must analyze each g/s supplied by the business on its own.

Question 9

when would a g/s be considered to be used for making taxable supplies?

Answer 9

there must be a functional link between the g/s and the making of taxable supplies for it to be considered used in the making of taxables

Question 10

when will output tax be charged on imported goods?

Answer 10

when goods are imported by any person. buyer pays output tax to SARS

Question 11

what does BNLS stand for?

Answer 11

Botswana
Namibia
Lesotho
Swaziland

Question 12

what are the tax consequences for a good imported from BNLS?

Answer 12

the vendor who buys the imported goods will pay output tax but no customs duty

Question 13

what is the TOS for a good imported from BNLS?

Answer 13

when the goods physically enter SA

Question 14

what is the VOS for a good imported from BNLS?

Answer 14

the customs duty value or consideration if not given

x15% to calculate the output tax

Question 15

what is the TOS for a good imported from outside BNLS?

Answer 15

when the goods are cleared for consumption

Question 16

what is the VOS for a good imported from outside BNLS?

Answer 16

CDV + CD + (0,1)(CDV)

Question 17

can a vendor claim back any output tax paid on imported goods?

Answer 17

it can claim it back as an input tax deduction if it is used for taxable supplies