Vat

Question 1

Vat S23-26 50 50A who register

Answer 1

Compulsory if supplies exceed 1mil for 12 months and if written obligation for that amt
Foreign supplier of electronic services must register if supplies more then 50k in SA. Use pmt basis
Combined turnover of enterprises held will be used. Deemed same enterprise
Voluntary registration: 50k supplies and have to submit bio metrical info
If threshold exceeded due to abnormal cause, not have to register

Question 2

Vat S20 21 record keeping

Answer 2

Issue within 21 days of supply
Under R50 no invoice
Under 3000 abridged invoice
Must have debit and credit notes for cancelation

Question 3

Vat Supply def

Answer 3

Sale, voluntary or compulsory. Performance Ito a contract

Question 4

Vat Services def

Answer 4

Done or to be done
Granting or surrender of a right
Making available of an advantage

Question 5

Vat Supply in furtherance of enterprise

Answer 5

Free samples is a supply de beers
Must receive consideration, but can be in many forms

Excluded from enterprise
Exempt supplies, hobbies, remuneration of employees, commercial accommodation not more than 60k,

Question 6

Vat Exclusions from enterprise def

Answer 6

Make exempt supplies
Hobbies
Employee employer remuneration
Commercial accommodation less than 60000 in12 months

Question 7

Vat S11 zero rated

Answer 7

Input can still be claimed
Export of g and s. Supply service to non res who is not in SA Stellenbosch farmer winery
Ancillary services

In30 direct export via designated commercial port plus doc proof. Issue within 90days
Going concern agree in writing income earning activity, operate without further acquisitions and actions
Seller; mainly taxable but partly used for non taxable supplies… All zero rated. Not mainly for taxable… Only portion for taxable purps can be zero
Do not have to dispose all assets

Question 8

Vat S12 exempt supplies

Answer 8

Financial services… Not merchant discount… All derivatives
Supply of transport by road or rail of fair paying passengers and their goods.education
Dwelling, excludes where employer supplies it to employees.

Question 9

Vat S8 18(3) deemed supply

Answer 9

Cease to be a vendor… If assets under loan unpaid-S22 output on unpaid debt for which input was claimed and S8 deemed output for paid amt

Indemnity pmts at tax fraction

Fringe benefits
Single supplies BA

Question 10

Vat S9 Time of supply

Answer 10

Earlier of invoice or pmt
Deposit not consideration until applied or surrendered
Connected persons date of removal, made available, service perform
Installment credit agreement, when delivered or paid
Rent when due or paid
Fringe Benefit time employee tax payable

Question 11

Vat S10 value of supply

Answer 11

Consideration in money or open market value if not in money
Value is consideration less tax
Connected person open market value
Deemed supply when cease to be vendor or transfer to branch- lesser of cost plus transport and open market value
Installment credit agreement financier -cost, dealer -usual sp
Change of use from taxable to non taxable, Open market value
Change in use. No adj if less than 40000, value lower of omv and adj cost
Commercial accommodation. Not less than60000 pa. Domestic goods and services supplied for more than 28 continuous days, 60% vat if included in charge
Export of secondhand goods, zero rating will not apply if notional input was claimed. Consideration will be the purchase of the exporter. If purchased originally by connected person, higher of cost to conpers or vendor

Question 12

Vat S15 accounting basis

Answer 12

Invoice -receipt or invoicing
Payment- receipt
No claim for vat input unless tax invoice held s16
Input must be claimed in five years
Only use pmt basis if tax supplies not more than 2.5mil for 12 months
If on pmt basis and supply for more than 100000 must use invoice basis
Can change but would have to make pmt adjustment

Question 13

Vat S17 input

.tax denials

Answer 13

Denied
Entertainment unless charge to cover al direct and indirect expenses or equal to omv. Not apply if excess food given to employees or employees waay from residence for at least one night. Must be to anyone in connection to an enterprise carried on by him.

Club subscription
Motorcar incl light delivery vehicle. Excl more 16person and 3500kg

Question 14

Vat S17 input tax

.aportionments

Answer 14

Acquisition of goods used for making partly exempt supplies. Apportion input tax
Not necessary if 95% taxable use

Question 15

Vat S17 input tax adjustments

Answer 15

Adjust if:
Bad debts written off
Credit notes by creditors
Debit notes received
Settlement discounts
Indemnity payments
Change of use

Question 16

Vat S17 notional input

Answer 16

Secondhand in SA from republic residents for use of taxable supply
Tax fraction to lesser of consideration in money or omv. Irrespective of at arms length or con person. Only claim to extent pmt made including reduction of debt.
If fixed property, can claim notional input on fixed property as long as transferred to name to extent paid. Not ltd to transfer duty.

Question 17

Vat Adjustments to output tax

Answer 17

Bad debts recovered
Credit notes received incl for second hand goods
Debit notes issued
Output payable on creditors of more than twelve months unless agreement to pay later than that. Will be able to claim input when pay
Prompt settlement discount
Overpayment received not refunded for four months of receipt
Change of use

Question 18

Vat S16 18 18A. Change of use adjustments

Answer 18

G and s used for taxable supplies:
Now used for private or exempt use. Tax fraction of omv
Decrease in extent of use. No adj if adj cost is less than 40000. Lesser of adj cost (no finance charges and direct labour cost capitalized for accounting) and omv
No adj if less than 10%decrease in 12 months

Question 19

Vat S18A going concern adjustment

Answer 19

Going concern was making partly non taxable supplies.
Not required to adjust if 95% taxable supplies
Purchaser adjustment:
Cost of gc
Less cost of g and s for which input would be denied like motor car
Equal
Less% intended use for taxable supplies
Equal
14% thereof

Cost deemed omv if connected

Question 20

Vat Input adjustment

Answer 20

Lesser of adj cost or omv times tax fraction
When input was ltd because partly used for non tax, then sell, adjust input by lower of adj cost or omv x %not used x tax fraction

Question 21

Vat S18(3) Fringe benefits

Answer 21

Vendor provides employee with benefit which falls into gi para i or it is taxable for vat
Not apply if res accommodation, low int loans, share options. Or zero rated, entertainment, travel allowance, meals, payment of employees debt, medical. Not apply if in course of making exempt supplies.
Mv
Input denied 0.3% of determined value.(cost excluding vat)
If not denied 0.6%
Employee bear maintenance get 85 deduction pm to get consideration
If employee pay for use it will be deducted from consideration if input was not denied and it is for fixed cost and maintenance or input was allowed and it is for maintenance. Thus charge output on that

Question 22

Vat S13 14 imports

Answer 22

Importer is liable for vat
14% on custom duty value
Plus 10% of customs duty value
Plus any other duty

Vat payable on imported services by recipients if non vendor or for purpose other than making taxable supplies only

Question 23

Vat S73 tax avoidance

Answer 23

Scheme entered into for tax benefit not in normal business purposes. Created a right which would not occur at arms length
Solely for tex benefit

Question 24

Vat Fixed property

Answer 24

Change of use apply to fixed property

When supply partly non tax used fixed property, deem wholly used, thus adjust input

Question 25

Vat S18B Temporary letting of fixed property

Answer 25

Developers who Let for residential dwelling, for 3 years does not have to apply adjustment if intention is to supply as taxable supply

Question 26

Vat accounting basis

Answer 26

Payment or invoice
Tax invoices must be furnished to claim deduction
Input must be claimed in 5y of invoice.
Payment basis must not be automatically used. Only if less than 2.5m supplies and must register.
Must use invoice basis if supply transaction is more than 100 000

If change basis, must make an adjustment