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TAXF > Output VAT > Flashcards

Output VAT Flashcards

1
Q

What is the “Trigger” of VAT?

A

According to Section 7(1) it is levied on
1. Supply of goods or services by a vendor in the course of furtherance of an enterpise
2. Import of goods
3. Imported services

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2
Q

What are Barter transactions?

A

The exchange for a service or good for another that is not traceable (small amount of cash)

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3
Q

What are not classified as Goods?

A

Money except gold coins
Revenue stamps except if you are the collector
Rights arising from a mortgage bond or pledge of goods

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4
Q

Compulsory registration as a Vendor s23(1)

A
  • If a person’s taxable supplies exceeds R1m at the end of any 12 month period
  • Likely to exceed R1m in a 12 month period
  • Foreign supplier of electronic services (taxable if supply exceeds R1m)
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5
Q

What is excluded from taxable supplies for s23(1)?

A
  • Value excluding VAT itself
  • Excludes exempt supplies
  • Excludes supplies form significant downscaling
  • Excludes supplies resulting from replacement of capital assets
  • Excludes supplies from temporary abnormal circumstances
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6
Q

What is voluntary registration as a Vendor?

A

A person may voluntarily register for VAT if his taxable supplies exceed or are expected to exceed R50 000 during a 12-month period

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7
Q

Compulsory registration as a natural person

A

If they carry more than one enterprise & taxable supplies exceed R1m, then the person has to register not the enterprise

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8
Q

Compulsory registration as an enterprise

A

If the enterprise is in separate companies & seen as separate persons (s50A), each must earn > R1m before compulsory registration

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9
Q

What are the admin requirements to compulsory registration?

A
  • Fixed address
  • Bank Account
  • Proper accounting records

Within 21 days after required

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10
Q

Specific inclusions in “Enterprise”

A
  • Commencement/Termination of enterprise
  • Welfare organisation
  • Foreign donor funded project
  • Supply of foreign electronic services to a SA resident
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11
Q

What is excluded from an enterprise?

A
  • Supply of services by an employee to their employer
  • Hobbies
  • Exempt supplies
  • Commercial accomodation not exceeding R120 000 in a 12 month period
  • Certain supplies made by branches or main businesses situated outside SA
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12
Q

Accounting Basis s15

A

There are 2 basis available:
1. Invoice basis
2. Payment basis

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13
Q

The following persons may use the payment basis:

A
  • Public authority 7 municipalities
  • Associations not for gain
  • Water board & Local electricity distributor
  • Natural persons who’s total taxable supplies do not exceed > R2,5m in a 12 month period
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14
Q

Category A Tax period

A

Two months period ending in uneven (Jan, Mar)

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15
Q

Category B Tax period

A

Two months period ending in Even (Feb, Apr)

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16
Q

Category C Tax period

A
  • If value of taxable supplies for a 12 month period > R30m
  • Vendor applied for category
  • Classified into category by default by SARS
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17
Q

Category D Tax period

A

6 monthly periods ending in Feb/Aug as well as Farming and a value of taxable supplies < R1,5m for a 12-month period

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18
Q

Category E Tax period

A

Specific entities who solely earn rental/management fees from connected persons at the end of the YOA

19
Q

What are zero-rated supplies(s11)?

A
  • Direct exports of moveable goods
  • Exported services
20
Q

Services rendered outside SA s11(2)(k)

A

Services rendered outside of SA even if it is to a resident, although electronic services outside of SA is excluded

21
Q

Services to non-residents s11(2)(l)

A

Services to a non-resident is zero-rated if the non-resident is not physically present in SA when the service is rendered

22
Q

Other zero-rated supplies s11

A
  • Sale of a going concern to a vendor
  • Fuel levy goods
  • Supply of certain agricultural goods
  • Certain basic foodstuff
  • Gold coins issued by SARB
  • Cake wheat flour & white bread flour
  • Sanitary towels/pads/liners
  • Municipal property rates
23
Q

Exempt supplies s12

A
  • Financial services excet feeleased services
  • State educational services & certain approved institutions
  • Trade Union fees
  • Supply of orignally donted goods
  • Transport by road or railway of paying customers and their luggage
24
Q

When is commercial accomodation a taxable supply?

A
  • If the commercial accomodation exceeds R120 000 in a 12 month period
  • If it is supplied at an all-inclusive rate for a period longer than 28 days, the value of the supply is 60% of the all-inclusive tarrif
25
Q

Importation of goods s7(1)(b) & s13

A
  • BLSN - countries
  • Other countries
26
Q

BLSN - countries
Time of supply s13(1)(iii)

A

When goods enter SA it must be via a designated port

27
Q

BLSN - countries
Value of supply s13(2)(b)

A

15 / 100 x Customers Value

BLSN doesn’t levy customs duty between them, only VAT

28
Q

Other countries
Time of supply s13(1)(i)

A

On the date it was cleared (can be in the warehouse)

29
Q

Other countries
Value of supply s13(2)(a)

A

15 / 100 x (customs value + 10% of CV + Non-rebated customs duty + Import surcharges)

All other countries charge custom duties

30
Q

Imported services s14

A

VAT only levied if:
* Imported by non-vendor
* Imported for use other than for making taxable supplies

31
Q

Which imported services have no VAT?

A
  • Supply service already subject to VAT @ 15%
  • Supply if it was within SA it would have been exempt or 0%
  • Foeign education
  • Serviice by employee to employer
  • Service value<R100
32
Q

No apportionment of Output TAX

A

Goods & services, acquired by vendor, partially used for making taxable supplies but sells the goods/services so that later VAT is levied on the full amount.

Extra Input Tax may be claimed ito s16(3)(h)

33
Q

Time of supply s9(1)

A

Important for VAT purposes because it determines when a vendor must account for VAT

34
Q

What is the general rule of s9(1)

A

Invoice basis, earlier of:
* Date of invoice
* Date payment of consideration is received by supplier

35
Q

Time of supply: Connected persons s9(2)

A

Recipient & supplier are connected persons

36
Q

Time of supply: Rental agreements (Commercial)

A

Goods supplied ito rental agreement, the time of the supply is the earlier of the date
* on which payment is due
* n which payent is received

37
Q

Value of Supply

A

Either:
* Amount of money if consideration is in money OR
* Open-market value of consideration if consideration is not in money

General rule of Value of Supply

38
Q

Value of Supply: Connected Persons s10(4)

A

When vendor supplies goods/services to a connected person for
1. no consideration
2. a consideration hat is < open-market value
3. the connected person would not have been able to claim a full input tax credit
THEN
consideration of supply is deemed to be its open-market value

39
Q

Value of Supply: Entertainment s10(21)

A

When the vendor supplies etertainment & no input tax credit was claimed with the purchase

40
Q

Value of Supply: Supply @ no consideration s10(23)

A

Value of Supply: NIL
Supply between connected persons:
sec10(4) Overrides - deemed @ open MV

41
Q

Deemed supplies: Indemnity payments s8

A

Where a vendor receives an indemnity payment in terms of an insurance contract, it is deemed to be received in respect of a supply (Only for payments in Money)

42
Q

Deemed supplies: Supplies to independent branches

A

If the branch/head office is independent:
* Permanently situated outside SA
* Can be identified seperately
* Has a seperate accounting system

THEN
Branch/Head office is considered to be a seperate business and the normal VAT rules applies as if importedexported from a third party

43
Q

Deemed supplies: Fringe benefits s18(3)

A

The vendor provides employees with a benefit that falls into GI as a fringe benefit to paragraph (i)

Fringe benefit is not a taxable, zero-rated or entertainment supply

44
Q

Deemed supplies: Only 4 fringe benefits

A
  1. Assets given to employees
  2. RoU of Assets
  3. Services made available to employees
  4. RoU of Car

TAXF (7 decks)

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