South africa vat act pdf

The changes are effective 21 july 2019 and apply to all section 72 ruling applications made after that date. Some of the notable value added tax vat changes relates to the amendments to section 20 of the vat act pertaining to the issuing of tax invoices, the insertion of the definition of face value dealing with irrecoverable debts and other. Value added tax amendment act 34 of 2000 gg 2465 deemed to have come into force on the date of commencement of the primary act section 34 of act 34 of 2000 value added tax amendment act 6 of 2002 gg 2818. The south african government announced, on 27 march 2020, as part of the measures it has put in place under the disaster management act 57 of 2002, that the importation of essential goods as defined in annexure b of regulation r. This act has been updated to government gazette 40004 dated 20 may, 2016. Value added tax vat was introduced in botswana with effect from 1 july 2002 to replace sales tax. South african revenue service act 34 of 1997 government notice 1165 in government gazette 18257, dated 5 september 1997. The income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website. Vendors registered for vat are obliged to collect vat from their customers or clients on behalf of the south african revenue services sars. South africa announces vat exemption and customs duty.

The rate was then increased to 14% in 1993, and was increased to 15% on the 1st april 2018 and currently remains the same. Under the old regulations, the south african consumer had the burden of declaring the vat on the electronic services received. Value added tax vat is a tax charged on the supply of goods or services by a vendor. An act of parliament to impose a tax to be known as value added tax on goods delivered in, or. It is levied in terms of the value added tax act 89 of 1991. As of 1 january 2016, a 15 percent wht will be levied on service fees paid to a foreign person, to the extent paid from a. This act shall come into operation on a date to be appointed by the minister. The vat representative, who is a natural person, has to be a resident of south africa and will be responsible for the duties and obligations, as imposed by the vat act, on the company. Income tax act 70 of 1989 legal succession to the south african transport services act 9 of 1989 income tax act 101 of 1990 income tax act 129 of 1991. Botswanas vat legislation is contained in the value added tax act, 2000. Where relevant to the syllabus, the proposed changes to the vat act in terms of the rates and monetary amounts and amendment of revenue laws bill 2018, the taxation laws amendment bill 2018 and tax administration laws amendment bill. South africa is expected to renegotiate its existing tax treaties.

Burs is responsible for the administration and enforcement. Tax exemption guide for public benefit organisations in south africa issue 4 2 vat means value added tax payable under the vat act. African community customs union and in interpreting that annex, the general rules of interpretation set. Summary of the provisions of the act south african vat is destinationbased, which means that only the consumption of goods and services in south africa is taxed. Amended by south african revenue service act 34 of 1997. Value added tax vat 404 south african revenue service. Refining the vat treatment of foreign donor funded projects applicable provision. During the 1980s, south africa imposed the general sales tax gst on goods and services. The value added tax syllabus content is reproduced and specifically crossreferenced to the value added tax act. South africa and the united states have entered into a double taxation treaty. The ottawa taxation framework further endorsed the destination principle of vat which is the one that the south african vat act is based on. Vat was imposed in 1991 at a statutory rate of 10%.

Read an august 2020 report pdf 72 kb prepared by the kpmg member firm in south africa. A registered business is charged with a responsibility of collecting vat when supplies are made to customers. The value added tax act imposes a 15 percent tax on the value of goods or services supplied by a vendor, imported goods, or services provided by a resident supplier or one carrying out business outside of south africa to a resident of south africa who uses the services in south africa vat act. Vat history 1 when the vat act, no 89 of 1991, was promulgated on 12. A number of specific terms used throughout th guide are defined in the vat act. An act of parliament to impose a tax to be known as value added tax on goods delivered in, or imported into kenya. Amended by south african revenue service act 34 of 1997 amended by taxation laws amendment act 27 of 1997. Valueadded tax act 89 of 1991 lph chartered accountants. Vat is paid on the supply of goods or services in south africa as well as on the importation of goods into south africa. In terms of section 55 of the vat act, read with section 29 of the tax administration act, the vat 215. Applicable laws constitution of the republic of south africa, act 108 of 1997 as amended companies act of 2008 as amended by the companies amendment. Section 24 of the tax administration act 28 of 2011 provides for a single tax account and allows sars.

Value added tax vat is a form of an indirect tax levied on goods and services supplied in and outside lesotho. Tax act 58 of 1962, which section is similar to s 36 of the vat act. Jul 21, 2014 to alleviate this deemed supply issue, s512 of the vat act provides that the old and the new partnership are deemed to be one and the same vat vendor for purposes of the act. Finally, certain organisations are eligible for value added tax preferences. This is achieved by imposing vat on the local supply of goods or services by south african vat vendors, and levying vat on the importation of goods and certain services into south africa. In south africa vat is levied on the supply of goods and services. Vat relief for zerorated goods covid19 south africa. It is a destination vat, invoice credit method, with full credits for capital goods. Passed by parliament and assented to by the president. Vat was introduced in september 1991 at a rate of 10%. History of sales tax rates in south africa general sales tax gst 3 july 1978. New zealand as the south african vat act mirrors that of new zealands goods and services tax gst regulations in many ways as. Value added tax act, 20 an act to revise and consolidate the law relating to the imposition of the value added tax and to provide for related matters. The terms republic, south africa or the abbreviation rsa, are used interchangeably in this document as a reference to the sovereign territory of the republic of south africa, as set out in the definition of republic in section 11.

Value added tax amendment act 61 of 1993 taxation laws amendment act 97 of 1993 revenue laws amendment act 140 of 1993 taxation laws amendment act 20 of 1994 taxation laws amendment act 37 van 1996 revenue laws amendment act 46 of 1996 taxation laws amendment act 27 of 1997 south african revenue service act 34 of 1997. Aligning provisions of the vat act with the insurance act. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of. Section 1 of the value added tax act, 1991, is hereby amended. Other useful sites include the sars websiteand the treasury departmentwebsite. Sars amended the rules on electronic services in order to protect local suppliers, addressing the vat leakages and tax consumption in south africa. It takes the form of an appeal against additional value added tax vat assessments raised by the respondent, the commissioner for the south african revenue service csars, against the appellant, in the amount of r3 444 764 for its. The terms commissioner and minister refer to the commissioner for sars and the minister of finance respectively, unless otherwise indicated. Value added tax act 10 of 2000 gg 2337 brought into force on 27 november 2000 by gn 2202000gg 2402 as amended by. An explanation to show that the ruling if granted will not be contrary to the intention of a specific provision of the vat law or the policy construct of the vat act as whole. Value added tax was introduced on 30 september 1991. Valueadded tax and the disposal of a partnership interest to. Valueadded tax act 10 of 2000 legal assistance centre. However, s512 of the vat act is only applicable were a new partnership comes into being and continues to carry on the business of the old partnership as a going concern.

An analysis of south africas value added tax by delfin s. The vat act requires anybody conducting an enterprise in south africa to register as a socalled vat vendor. This announcement was welcomed by some as an increase in the vat rate was seen as one of the ways in which the budget shortfall could be funded in the least damaging way to the economy. This act may be cited as the value added tax act, 2001. However, it appears as if there is also some pressure mounting on government due. All references to the vat act in this document will be to the value added tax act, no. In addition, it will be clarified that the transfer of a longterm reinsurance policy is an exempt financial service.

In terms of section 55 of the vat act, read with section 29 of the tax administration act, the vat 215 and vat 216 records and the relevant invoices or tax invoices whichever are applicable are required to be retained by the client as relevant material. In this paper, the authors describe south africa s value added tax vat, showing that 1 the vat is mildly regressive, and 2 it is an effective source of government revenue, compared with. Value added tax amendment act 12 of 2015 gg 5911 came into force on the first day of the month following the month of publication, which made it effective on 1 january 2016 section 5 of act 112011 act. Valueadded tax act 89 of 1991 south african government. In south africa vat is levied on the supply and importation of goods and services, while exported goods and services are exempted.

The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislationwebsite. In south africa, value added tax vat is imposed on the consumption of goods or services in south africa. Enacted by the parliament of lesotho chapter i preliminary short title 1. Nonprofit law in south africa council on foundations. It was introduced in july 2003 to replace an old system of indirect taxation called general sales tax gst. Vat relief for zerorated goods, covid19 the south african revenue service sars has issued guidance concerning value added tax vat rules in response to the coronavirus covid19 pandemic. In south africa, it is usually the case that an entity selling.

The vat system is administered by the commissionergeneral of the botswana unified revenue service burs. Value added tax vat in south africa vat was introduced in south africa in 1991 to replace gst. Generally, returns are submitted on a twomonthly period. The value added tax act an act to make provision for the imposition of a tax to be known as the value added tax vat on supplies of goods and services and for related matters 1st january, 1998 1st july, 1998 1st march, 1998 s. However, registered vat vendors can claim any vat paid on supplies or expenses needed to generate. In 1986, the margo commission recommended that this system be replaced with a comprehensive business tax, or alternatively, a value added tax vat. Valueadded tax amendment act south african government. C amendment of the value added tax act no 89 of 1991 the vat act requiring vat registration for nonresident electronic service suppliers with effect from 1 june 2014, and c the implementation of a single registration process on 12 may 2014. South african revenue service sars and national treasury treasury to bring foreign ecommerce suppliers on to a level tax playing field, by requiring them to register under the value added tax act 1991 the vat act.

Recommendations were made on how the vat act can be amended to. In the past, typical ecommerce transactions were taxed in terms of a reverse charge mechanism, where the onus was on the consumer to pay vat on imported e. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws. Value added tax act an act to impose and charge value added tax on certain goods and services and to provide for the administration of the tax and matters related thereto. It is applicable on all transactions where value is added. At present the vat rate in south africa is 15% but the minister of finance can change this at any time was increased from 14 to 15% in april 2018. Income tax act 28 of 1997 south african revenue service act 34 of 1997.

Amended by value added tax act 89 of 1991 amended by revenue laws amendment act 32 of 2004. Due to the promulgation of the insurance act in 2018, it is proposed that certain definitions referenced in the vat act will be revised to ensure alignment. Value added tax 7 issue 1 chapter 476 value added tax act date of assent. South africa, as set out in the definition of republic in section 11 of the vat act. To provide for the imposition and collection of value added tax and to provide for matters. South african government lets grow south africa together. Proposed amendments to the value added tax act, no. The pay now, argue later rule in terms of section 36 of the value added tax act prima facie infringes on a taxpayers right of access to the courts as envisaged in section 34 of the constitution. May 31, 2019 various amendments to the taxation laws amendment bill tlab and the tax administration amendment act taa was promulgated in january 2019.