VAT

Question 1

Foreign suppliers for electronic services are required to register as SA VAT vendor

Answer 1

oUTPUT tAX

Levied on the supply of
goods or services
in the course or furtherance of
any enterprise (s7(1))

Question 2

If an overpayment has not been refunded within four months, the
excess amount is considered to be a deemed supply and output VAT
must be accounted for.

Answer 2

EXCESS REFUNDED THEN AN input tax can be claimed

Question 3

o The lessor has to account for output on the leasehold improvements as
follows:
Deemed supply = A x B x C
A = 15/115
B = Amount stipulated in the agreement or OMV if no amount stipulated
C = % of use not used for making taxable supplies

Answer 3

Change in use adjustment

Output tax must be accounted for where goods/services were used for vatable
supplies and now no longer used for vatable supplies
 Output tax is calculated using the open market value x tax fraction (OMV x 15/115)
NB: This adjustment is not apportioned
 Where partial input tax was originally claimed an additional input tax adjustment can
be claimed as follows:
A x B x C
A = the tax fraction
B = the lesser of adjusted cost, open market value, B in the formula A x B x C x D in
s18(4)
C = % use for non-taxable supplies for the period before the adjustment

Question 4

There are three categories for going concern adjustments:
 Where the assets of the going concern are used:
 100% (or greater than 95%) for taxable supplies
 More than 50% but less than 95% for taxable supplies
 Less than 50% for taxable supplies

Answer 4

100% taxable supplies
 The seller and purchaser both levy output/input tax at 0% and there
are no further adjustments.

Question 5

> 50% taxable supplies but less than 95%
 The entire transaction will be zero-rated
Seller:
* Can claim an additional input tax credit in respect of the part of
the GC for which input tax was not claimed in the past. These
will be a change of use and an adjustment in terms of s16(3)(h)
Purchaser:
* Purchaser must raise output tax on the portion of the GC not
used to make taxable supplies (s18A) and only on assets where
input tax would not have been denied

Answer 5

<50% taxable supplies
Only portion of selling price relating to going concern will be zero-rated
 Seller:
* Charge output tax on going concern portion
* Claim an input tax adjustment in terms of s16(3)(h) in respect of
assets used for non-taxable purposes sold as part of the going
concern
 Purchaser:
* Claim input tax on the portion charged at standard rate (only if it
will be used for making taxable supplies)
 A s18A adjustment for the purchaser where he does not apply the
going concern portion for taxable purposes

Question 6

 Sale of fixed property is also a supply of goods for
VAT purposes
 Subject to either input tax or transfer duty (VAT takes
precedence over transfer duty)

Answer 6

A disposal of property by a non-vendor will not attract
VAT but subject to transfer duty

Question 7

Output tax time of supply:
Payment basis:
 As and when payment is received
Invoice basis:
 Time of supply is earlier of registration of transfer or date payment of
any consideration
NB: Only account for output tax to the extent that consideration is received
(unless connected person – s10(4)

Answer 7

Payment basis: Extent payment is received
Invoice basis: same as for output tax rules stated above.

Question 8

when we don’t pay output tax

Answer 8

Question 9

s18D

Answer 9

Question 10

Connected person

Answer 10

OMV

Question 11

Notional input tax to the extent that payment is made

no notional input tax om services

Answer 11

Barter transaction depends on invoice output tax