Value Added Tax rules (experiemental)

Question 1

What are the VAT implications of receiving a deposit?

Answer 1

section 1 of the VAT act
- A deposit is not considered payment unless the person who receives it applies it as consideration for the supply
- if the deposit is repayable until the a certain day, then it is most likely not considered to be payment or forfeited until that certain day arrives

Question 2

What is the rule for time of supply when it comes to VAT?

Answer 2

section 9 of the VAT act
- it is normally at the earlier of payment or the invoice date

Question 3

What are the VAT implications of supplying to an export country?

Answer 3

section 11 of the VAT act
- any goods that are exported to another country will be zero rated, even if they are manufactured in South Africa

section 11(2)(f) of the VAT act
- any services that are supplied to an export country, IN CONNECTION with land in that export country, will also be zero rated