Vat summary taxable supplies south african tax guide. Vendors will need to act quickly to ensure compliance. Valueadded tax vendors issuing debit or credit notes. Legal tax design, tax and financial sector policy unit, 2018. Effective 1 june 2014, south africa introduced legislation relating to vat. The provisions of the vat act relating to the application of an increase in the tax rate will apply to transactions where the applicable tax rates overlap. Introduction vat was introduced in south africa in 1991 to replace gst. We informed you about the changes in the previous indirect tax alerts and we now summarize the approved changes that will have the biggest impact. Revenue cost of zero rating proposals r million in 2018 prices, adjusted for. Take note of whether amounts are given inclusive or exclusive. In south africa vat is levied on the supply and importation of. In south africa s 2018 national budget speech, released on 21 february 2018. For example, if goods were sold before 1 april 2018, the tax fraction of 14114. The print subscription includes a free mobile version as well as updates for 12 months print and mobile.
Sars has implemented an improved vat refund process in line with legislative changes which saw the new section 5070 incorporated into the vat act no. Essentially the tax gap in the vat environment is the difference between the tax that is due. Tax administration laws amendment act 22 of 2018 english. Vat in south africa unuwider united nations university. The valueadded tax syllabus content is reproduced and specifically crossreferenced to the valueadded tax act.
Application of knowledge and revision of difficult concepts 7 hours. Doubtful debt allowances the latest set of proposed changes to section 11j of the income tax act seeks to remove south african revenue service sars discretion, in part to reduce the sars administrative burdenbut at what cost to the taxpayer. 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. South africa lesotho swaziland south sudan somalia somaliland cameroon africa tax guide 2018 19. 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. Value added tax vat has received widespread attention in south africa due to the recent decision to increase. Amended by south african revenue service act 34 of. South african income tax 2018, underlining and making summaries, and familiarising yourself with the valueadded tax act no.
With acts you are guaranteed the latest and most up to date resource for your legislative needs. Vat alert 21 february 2018 new vat regulation 15% vat and the impact on your business the minister of finance the minister announced, in the 2018 annual budget, that the vat rate will increase by 1% to 15% with effect from 1 april 2018 the effective date. You are required to advise the south african revenue service sars within 21 days of. Recommendations on zero ratings in the valueadded tax. Valueadded tax act 89 of 1991 south african government. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. Foreword the africa tax guide 2018 19 is an annual publication that provides an overview of the taxation and business regulation regimes of africa s most significant trading countries. South african vat treatment of the supply of electronic. Doubtful debt allowances, proposal to revoke commissioners discretion south africa.
Time of the supply when is this vat payableclaimable. The national council of the slovak republic approved an amendment to the vat act on 7 december 2017 that will enter into force on 1 january 2018. Group of companies definition s 1 of the income tax act. The valueadded tax vat rate was increased from 14% to 15% on 01 april 2018, as announced in the february 2018 national annual budget. By processing the vat registration and issuing the vat number, the south african revenue. Mareli treurnicht adjustments to tax rates special edition budget speech tax and exchange control alert 21 february 2018. Finance minister malusi gigaba announced that valueadded tax would increase from 14% to 15%. Valueadded tax vat introduction during the 1980s, south africa imposed the general sales tax gst on goods and services.
The rates and monetary amounts and amendment of revenue laws act 21 of 2018 intends. Sars administers a wide range of legislation in terms of part 1 and schedule 1 to the south african revenue service act, 1997. The vat rate will increase with effect 1 april 2018. Valueadded tax vat basics south africa 2018 youtube. The value added tax act 2014 the united republic of tanzania no. Module 6 valuedadded tax applies the vat act cost is born by the final consumer 2 important questions to ask when considering vat 1. The vat implications for the supply of services to. For the first time in democratic south africa valueadded tax vat is raised by one percentage point to 15% as part of the tough but hopeful budget finance minister malusi gigaba presented on.
From september 2019, taxpayers will be able to use a vat refund from the main account of an enterprise to pay the vat debt of another subaccount or branch of the enterprise. Vat pocket guide 20182019 tax consulting south africa. Lexisnexistax consulting south africa expatriate tax textbook. Valueadded tax amendment act south african government. Amended by rates and monetary amounts and amendment of revenue laws act 21 of 2018 amended by taxation laws amendment act 17 of 2017 by 18 dec 2017.
For income tax purposes, this guide has been updated to include the tax administration laws amendment act 22 of 2018, the taxation laws amendment act 23 of 2018 and the rates and monetary amounts and amendment of revenue laws act 21 of 2018. Amended by tax administration laws amendment act 22 of 2018 amended by rates and monetary amounts and. Countries mentioned as having reduced their corporate income tax rates in recent years are the united states of america, the netherlands and the united kingdom. 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. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. Xo africa safaris cc xo africa was a registered vat vendor who assembled tour packages to. Gerhard badenhorst the temporary relief provided for under s18b has not been extended any further and ceased to apply on 1 january 2018. Government notice 2244 of 31 july 1992 valueadded tax amendment act 61 of 1993 taxation laws amendment act 97 of 1993 revenue laws amendment act 140 of 1993.
Rates and monetary amounts and amendment of revenue laws. Taxation laws amendment act 23 of 2018 south african. Vat is an indirect tax and is levied on the value added in production during the different stages metcalf in baker and elliott,1997. Taxation laws amendment act 27 of 1997 south african revenue service act 34 of.
Valueadded tax in south africa legislation a complete collection of vat legislation. Please note that where a foreign ess supplier obtained a vat registration in anticipation of the changed regulations, it will be liable to account for the output vat from 1 april 2019. As a practical arrangement, the commissioner for sars has granted permission under proviso iii in section65 of the vat act for a vendor to display a notice that the pricedoes not include vat at the new rate of 15% and prices will be adjusted at point of the. 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 alert new vat regulation 15% vat and the impact on. As you will gather from learning unit 1 of this tutorial letter, the income tax act, no. Where relevant to the syllabus, the proposed changes to the vat act in terms of the rates and monetary amounts and amendment. The vat gap it has been noted1 that tax gaps exist in all economies, and south africa is no exception. South african courts have held, on a number of occasions, that taxpayers are entitled.
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. The taxation laws amendment act 23 of 2018 intends. In the ministers budget speech on 21 february 2018, an increase in the standard rate of vat was. Pdf in this paper, the authors describe south africas value added tax vat. Work stream 2 meeting, pretoria, south africa, 16 november 2018. Valueadded tax vat basics south africa 2018 pretera accounting services.
The much anticipated increase is the first increase in the vat rate since 1993. Value added tax vat 404 south african revenue service. Following the announcement of the vat increase, concerns have been raised, in parliamentary and other processes, about its impact on poor and lowincome households. Vat changes from the budget speech 2018 south african. In 1986, the margo commission recommended that this system be replaced with a comprehensive. The tax administration laws amendment act 22 of 2018 intends to. Pdf an analysis of south africas value added tax researchgate.