Africa and on the importation of goods and services to south africa. Secondhand goods act 6 of 2009 south african police service. Vat is an indirect tax on the consumption of goods and services in the economy. Unless otherwise indicated in the act, the vat act primarily provides for the. It is charged on the value of imports and on the value added markup on goods and services supplied by one business to another or to final consumers. Valueadded tax registration threshold south african. S 1, 4, 67, amended by taxation laws amendment act 27 of 1997. Despite this, historical tax reform crusades by the south african government in. Valueadded tax amendment act 61 of 1993 taxation laws amendment act 97 of 1993. Billys bakery 123 gingerbread road norwood 2192 vat no. Each chapter begins with contact information for the key people. For instance, in 201220, the south african revenue service, sars, received r215. Businessmen are vendors who act on behalf of the government in collecting valueadded tax from citizens.
If the sale is vatable and the agent is a vat vendor, the agent can issue his tax. Key revenue sources a brief history of income tax and vat. The content is current on 1 january 2012, with exceptions noted. Although fairly comprehensive, the guide does not deal with all the legal detail associated with vat and is not intended for legal reference.
Cliffe dekker hofmeyr out with the old and in with the. Section 105 of the taa, which was promulgated on 4 july 2012, provides that the. 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 section 71. To accommodate this phenomenon, section 54 of the valueadded tax act, 1991, provides as follows. The income tax act, no 58 of 1962 defines a company under south african.
The definition of enterprise is an important definition in the vat act and it sets out the. The report determines whether the south african vat act 89 of 1991 in its current form, can be applied. Chapter by chapter from albania to zimbabwe, we summarize consumption tax systems in 101 jurisdictions and the european union eu. New vat regulations open africa for sa business the sa. Before 1991, south africa used an indirect taxation system, called gst general sales tax. Nonprofit law in south africa council on foundations. Vat is chargeable on imports and the supply of goods and services in swaziland. The vat act requires anybody conducting an enterprise in south africa to register as a socalled vat vendor. Vat is currently set at the standard rate of 14% on the supply of most goods and services and on the importation of goods. 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 vat component of the tax revenue sars collected in 201718 can be. For guidance, the developers looked to south african company law for the 21st century. A draft taxation laws amendment bill tlab has been published and proposes various amendments to the income tax act 58 of 1962 income tax act and the value added tax act 89 of 1991 vat act, which amongst others seeks to clarify the existing provisions dealing with crypto assets in the south african tax law. Vat applies to the supply of goods and services by taxable persons in namibia and on the import of goods and services into the country.
Statistics south africa, 2012 title continuous in english only report no. Valueadded tax act, 1991 based on new zealands goods and services tax act, 1985. Professor cora hoexters administrative law in south africa cape town. Guidelines for corporate law reform may 2004, a policy document developed by the department of trade and industry the dti. Vat value added tax in south africa vat in sa is charged at each stage of the production and distribution process and it is proportional to the price charged for the goods and services. E it enacted by the parliament of the republic of south africa, as. The act has gone through numerous amendments with the act presently in force is the income tax act no 58 of 1962 which contains provisions for four different types of income tax. Income tax in south africa was first introduced in 1914 with the introduction of the income tax act no 28, an act that had its origins in the new south wales act of 1895.
Xo africa safaris cc xo africa was a registered vat vendor who assembled tour packages to. While the swaziland valueadded tax act, 2011 vat act as passed by parliament in october 2011 contains the normal principles of a value system, it does differ in some respects from the structure of the south african vat act and its introduction may pose significant challenges as well. Subject to the exemptions, exceptions, deductions and adjustments provided for in this act, there shall be levied and paid for the benefit of the national revenue fund a tax, to. Later, both companies accepted that vat was payable on the transaction and on 9 november 2012, the taxpayer paid vat to sars. Act, 1999 gst act, provides for a reduced input credit of 75% of the goods.
Pdf south africa and india have shared a longstanding and. Certain personalprivate details of parties or witnesses have been redacted from this document in compliance with the law and saflii policy republic of south africa high court of south africa. The content of the worldwide vat, gst and sales tax guide is straightforward. Vat, because it is an indirect tax that works through the price system, puts a larger burden of the tax on lowincome households. This guide is a general guide concerning the application of the valueadded tax act vat in respect of municipalities in south africa. The common monetary area is currently subject to a system of exchange controls, administered in namibia by the bank of namibia. Finance in a calabash introduction valueadded tax vat is a tax that is levied on the supply by a vendor of goods or services in the course and furtherance of any enterprise carried on by a vendor. In 2012 the cfa created the global forum on vat in order to engage and.
South african legislation seeks to increase exports by incentivising exporters in many forms, and the. Vat act replaced the goods and services tax gst which was almost similar tax on the consumption of goods and services. Amended by south african revenue service act 34 of 1997. The interest was calculated from 1 april 2010 to 9 november 2012. Be it enacted by the state president and the parliament of the republic of south africa, as follows. Charting the changes, 21 years of vat in south africa vat 21 pwc. Sequel to our august 2018 tax update on the amendments to the value added tax act, 20 act 870, national health insurance act, 2012 act 852 and ghana education trust fund act, 2000 act 581, the ghana revenue authority gra has issued administrative guidelines on the implementation of the new vat regime. F cc appellant and the commissioner for the south african revenue services respondent 10 judgment delivered on 10 september 2012 bertelsmann, j the appellant taxpayer submitted vague vat return that were not supported by vat input invoices. Finance minister malusi gigaba announced on 21 february 2018 that the vat rate will be increased by one percentage point to 15%. South african institute of chartered accountants integritax newsletter income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website the consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website. In the tax court of south africa pretoria case no vat 789 in the matter between. This article discusses the issue of whether services that are rendered to foreigners within south africa are zero rated for vat in terms of the value added tax act 89 of 1991 the vat act. Locally manufactured goods where the excise duty or environmental levy has not been included in the selling price s 163aiv. Interpreting the term enterprise for south african.
The second vat increase was announced earlier this year, and the vat rate increased to 15% on 1 april 2018. Vat stands for value added tax, and it is a consumption tax which is collected incrementally, based on the added value of a product or service. Effective 1 june 2014, south africa introduced legislation relating to vat. Whereas it is expedient to make provisions for imposition of value added tax. Vat alert 29 october 2012 saica annual subscriptions input tax no longer allowed to employers the vat ruling issued by sars during 2010 to the south african institute of chartered accountants saica, allowing vat vendors to deduct input tax on saica annual membership fees paid on behalf of employees, has been withdrawn. The transfer duty act, 1949, is hereby amended by the repeal of section 9a. Valueadded tax vat in south africa was set at a rate of 14% and remained unchanged since 1993. The collection of value added tax on crossborder digital trade jstor.
Arrangement of sections sections chapter 1 definitions 1. Technical and legal terminology has also been avoided wherever possible. From 1 march 2012 the exemption on foreign dividends earned by south. Sars then imposed a 10% penalty and levied interest due to the late payment in terms of s391 of the valueadded tax act, no 89 of 1991 act. The vat implications for the supply of services to. Valueadded tax amendment act south african government. Value added tax value added tax vat is introduced by the act no. Juta 2007 has quickly come to be regarded as the baxter of the constitutional era, cited frequently in the courts, and leading the way in the development of concepts key to the success of this. 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. The value added tax act 2014 the united republic of tanzania no. Amended by tax administration laws amendment act 21 of 2012. With acts you are guaranteed the latest and most up to date resource for your legislative needs.
In 2012 the oecd committee on fiscal affairs cfa created the global forum on vat. South african standard classification of occupations sasco 2012 statistics south africa. Vat is an indirect tax based on consumption of goods and services in the economy. Tax administration act 28 of 2011 south african government. Income tax south africa income tax act, 1941 income tax act, 1962 both personal income tax and corporate income tax are levied in terms of the income. Amended by valueadded tax amendment act 61 of 1993. Generally, returns are submitted on a twomonthly period. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. According to pwcs paying taxes report for 2012, the introduction of electronic. O amend the taxation laws amendment act, 2004, so as to change an effective date. On 19 october 2012, sars clarified in a notice that vendors who use.
Namibia is a member of the common monetary area with south africa, lesotho and swaziland. It is not a tax on output neither is it a tax on businesses. September 2012 charting the changes, 21 years of vat in south africa vat 21. Act to regulate the business of dealers in secondhand goods and pawnbrokers, in. It is imposed at 14% on most goods and services supplied by a vendor. Revenue is raised for government by requiring certain businesses to register and to charge vat on the taxable supplies of goods and services. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. The south african vat system is not restricted to the supply of goods and services. Valueadded tax act 89 of 1991 south african government. Vat summary taxable supplies south african tax guide.
Vat is a multistage tax levied at each stage of the value addition chain, with a provision to allow input tax credit itc on tax paid at an earlier stage, which can be appropriated against. The regulations will now cover all services as defined in the vat act that. Taxation may involve payments to a minimum of two different levels of government. The tourist may however apply for a refund from the vat refund administrator when departing from south africa. In this paper, we analyze the revenue, welfare, and income distribution effects of south africas value added tax. Valueadded tax vat 419 south african revenue service. S 1, 36, 39, 45, 67 amended by taxation laws amendment act 6 of 1992 amended by taxation laws amendment act 6 of 1991. Valueadded tax vat was introduced in south africa in 1991 by the. South african vat vendors involved in the export of goods will warmly welcome new vat regulations, which became effective on the 2nd of may 2014. Vat alert february 2012 swaziland pwc south africa.
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