VAT Flashcards
(22 cards)
VAT
LEVIED ON THE SUPPLY OF GOODS AND SERVICES BY A VENDOR IN THE FURTHERANCE OF HIS ENTERPRISE AT 15% OR O%
SUPPLY
INCLUDING PERFORMANCE IN TERMS OF A SALE, RENTAL AGREEMENT, INSTALMENT CREDIT AGREEMENT, AND ALL OTHER FORMS OF SUPPLY WHETHER VOLUNTARY, COMPULSORY OR BY OPERATION LAW
GOODS
CORPOREAL MOVEABLE THINGS, FIXED PROPERTY, AND ANY REAL RIGHT IN SUCH THINGS OR FIXED PROPERTY AND ELECTRICITY.
- Excluding Money, any right under the mortgage bond or pledge, any revenue stamp
SERVICES
ANYTHING DONE OR TO BE DONE, THE GRANTING, ASSIGNMENT, CESSION OR SURRENDER OF RIGHTS, THE MAKING AVAILABLE OF ANY FACILITY OR ADVANTAGE.
VAT VENDOR
COMPULSORY
- Value of taxable supplies > 1000000
VOLUNTARY
- Value of taxable supplies > 50000
VAT RETURN
ELECTRONIC VAT RETURN
- Have to be submitted by the last business day of the month after the end of the tax period.
MANUAL VAT RETURN
- Have to be submitted by the 25th of the month following the end of the tax period.
- The return covering DEC and JAN have to be submitted by the last business day of FEB.
PENALTIES
LATE PAYMENT
- 10% is payable plus interest at the prescribed rate for the period the VAT remains unpaid.
CEASE BEING A VENDOR
OUTPUT TAX LEVIED ON ALL GOODS AND SERVICES STILL OWNED ON THE DAY THE PERSON CEASES TO BE A VENDOR.
- it is not applicable if it is due to death or sequestration and the trust or executor is carrying on the enterprise
- Value of supply = lesser of cost at acquisition or Open MV on day of Cease
IRRECOVERABLE DEBTS
MAY CLAIM A DEDUCTION OF THE VAT FRACTION OF PART OF THE DEBT THAT IS BAD
- there must be a record of the debt written off.
- Ceased recovery action taken and decided not to take further actions or handed over for collection
- if an amount is recoverable later, Output VAT must be accounted for on the amount recovered.
CREDITORS NOT PAID
IF DEBT NOT PAID WITHIN 12 MONTHS AFTER IT BECAME PAYABLE AND HAS CLAIMED VAT INPUT, THE PORTION MUST BE TREATED AD VAT OUTPUT IN THE NEXT PERIOD AFTER THE 12 MONTHS HAVE ELAPSED
ZERO RATED SALE OF GOING CONCERN
ALL THE FOLLOWING CRITERIAS HAVE TO BE MET
(1) Both parties are VAT registered
(2) The agreement should be in writing
(3) The contract has to state that VAT is at 0%
(4) The business must be an income earning activity on the date of transfer
(5) All assets necessary to carry on the enterprise must be part of the sale agreement.
INDEMNITY PAYMENTS
WHEN YOU BOUGHT AN ITEM AND CLAIMED VAT INPUT, IF THE ITEM IS DAMAGED AND WAS INSURED, THE INSURANCE WILL PAY YOU OUT FOR DAMAGES - INDEMNITY
- value of supply = consideration X 15/115
- Time of supply = When payment received
NO DEEMED SUPPLY WHERE
- payments not related to taxable supply
- Reinstatement of goods
EXEMPT SUPPLY - RES ACCOMODATION
DWELLING - STRUCTURE/BUILDING FOR RESIDENCE
- Letting and hiring - not sale
- lodge and board by EE to ER
* EE entitled due to employment
* ER operates mainly for EE rather than profit
COMMERCIAL ACCOMODATION
IT IS A PLACE TO RESIDE IN BUT FOR A SHORTER TERM AND NOT THE FIXED PLACE OF RESIDENCE
- short stay < 28 days (FULL VAT OUTPUT)
- long stays > 28 days unbroken (60% VAT OUTPUT)
*Lodge and annual supply > 120000
RENTAL AGREEMENT
LETTING OF GOODS, INCLUDING FIXED PROPERTY
- Excluding lease referee to in instalment credit agreement definition
- including an operating lease
- Time = the earlier of payment received
INSTALMENT CREDIT AGREEMENT
CORPOREAL MOVEABLE GOODS OR MACHINERY OR PLANT, WHETHER MOVEABLE OR IMMOVABLE ARE SUPPLIED UNDER A QUALIFYING SALE OR LEASE
- Time of Supply = the earlier of delivery of goods or payment
- Value = Cash value excluding finance charges
SALE AGREEMENT
GOODS SOLD AND PAID OVER INSTALMENTS INCLUDING FINANCE CHARGES
- TOTAL PAYMENT > CASH VALUE
- Owner on day 1
LEASE AGREEMENT
RENT = AMOUNT PAID OVER A PERIOD, INCLUDING FINANCE CHARGES
- TOTAL PAYABLE > CASH VALUE
- Possession atleast 12 months
- Owner at the end of
CRITERIA FOR SPECIAL CONNECTED PERSON RULE
IF A CONNECTED PERSON SELLS TO A CONNECTED PERSON FOR LESS THAN MV OR NO CONSIDERATION
- and the buyer cannot claim full VAT INPUT then
- VALUE OF SUPPLY = MV
TIME = if goods are removed - time of removal, if services are performed - time performed, Invoice or payment date if earlier than above
INPUT VAT
GOODS AND SUPPLIES ACQUIRED FOR THE PURPOSE OF MAKING TAXABLE SUPPLIES
- WHOLLY > 95% : full VAT input
- PARTLY < 95%: Apportionment
TURNOVER METHOD (Amounts excl vat)
- taxable supplies/total supplies = % taxable supplies
SECONDHAND GOODS
ACQUIRED FROM A NON-VENDOR, SA RESIDENT AND GOOD SITUATED IN SA
- INPUT tax calculated at the lesser of Purchase price or MV
Deemed VAT may be claimed to the extent payment was made.
FIXED PROPERTY
WHEN CAN VAT INPUT BE CLAIMED
- Time = registration date
- Value = extent payment is made
IF THE SELLER IS A NON-VENDOR
- Transfer duty, value lesser of cost or MV and multiply by tax fraction
- Notional input VAT can be claimed
