Category: Value-Added Tax Act No. 89 of 1991

Section 40F (VAT) – Liability for tax and limitation of refunds in respect of National Housing Programmes

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40F.   Liability for tax and limitation of refunds in respect of National Housing Programmes

 

(1)     This section applies in respect of the supply of services deemed to be made by the vendor in terms of section 8(23), which services were supplied before 1 April 2026.

 

(2)     Where the Commissioner issued any assessment relating to tax periods ending before 1 April 2026 for an amount of tax or additional tax in respect of any supply of services as contemplated in subsection (1) in respect of application of the provisions as contemplated in section 11(2)(s) in respect of that supply, the Commissioner must, on written application by the vendor, amend that assessment to the extent that the amount of tax, additional tax, penalty or interest that arose as a result of that assessment has not yet been paid on that date: Provided that the assessment does not result in a refund to the vendor.

 

(3)      The Commissioner may not make any assessment for tax periods ending before 1 April 2026 in respect of the deemed supply of services contemplated in subsection (1).

 

(4)     If the vendor has charged tax at the rate referred to in section 7(1) instead of the rate of tax in terms of section 11(2)(s) in respect of the supply contemplated in subsection (1), the Commissioner may not refund any such tax or any penalty or interest that arose as a result of the late payment of such tax, paid by the vendor to the Commissioner.

[Section 40F inserted by section 45(1) of Act 5 of 2026 effective on 1 April, 2026]

Section 40E (VAT) – Liability for tax and limitation of refunds in respect of supplies by school

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40E.  Liability for tax and limitation of refunds in respect of supplies by school

 

(1)     This section applies in respect of the supply of services by a school contemplated in section 12(h)(ii) before 1 January 2026.

 

(2)     Where the Commissioner issued any assessment relating to tax periods ending before 1 January 2026 for an amount of tax or penalty in respect of any supply of services, as contemplated in subsection (1), in respect of the application of the provisions, as contemplated in section 12(h)(ii), in respect of that supply, the Commissioner must, on written application by the vendor, amend that assessment to the extent that the amount of tax, penalty or interest that arose as a result of that assessment, has not yet been paid on that date: Provided that the assessment does not result in a refund to the vendor.

 

(3)      The Commissioner may not make any assessment for tax periods ending before 1 January 2026 in respect of the supply of services contemplated in subsection (1).

 

(4)     If the vendor has charged tax at the rate referred to in section 7(1) in respect of the supply contemplated in subsection (1), the Commissioner may not refund any such tax, penalty or interest that arose as a result of the late payment to such tax, paid by the vendor to the Commissioner.

[Section 40E inserted by section 45(1) of Act 5 of 2026 effective on 1 January, 2026]

“Interoperability framework” definition of section 1 of VAT Act

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“interoperability framework” means the use of a network of service providers, where decentralised exchange of e-invoices, e-debit notes and e-credit notes occur, and that can facilitate clearance and interoperability between supplier and recipient, and complies with such further requirements as the Minister may prescribe by Regulation;

[Definition of “interoperability framework” inserted by section 11(c) of Act 4 of 2026]

“E-reporting” definition of section 1 of VAT Act

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“e-reporting” means the process of electronically submitting tax data, for purposes of this Act, extracted from an e-invoice, e-debit note, or e-credit note, to—


(a)     SARS;


(b)     a supplier or service provider of the supplier; and


(c)     a recipient or service provider of the recipient, where applicable,


within the interoperability framework in the form and manner as the Minister may prescribe by Regulation;

[Definition of “e-reporting” inserted by section 11(b) of Act 4 of 2026]

“E-invoice” definition of section 1 of VAT Act

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“e-invoice” means a tax invoice that-


(a)     is issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing; and


(b)     complies with such further requirements as the Minister may prescribe by Regulation;

[Definition of “e-invoice” inserted by section 11(a) of Act 4 of 2026]

“E-debit note” definition of section 1 of VAT Act

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“e-debit note”, means a debit note as contemplated in section 21, that-

 

(a)     is issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing; and

 

(b)     complies with such further requirements as the Minister may prescribe by Regulation;

[Definition of “e-debit note” inserted by section 11(a) of Act 4 of 2026]

“E-credit note” definition of section 1 of VAT Act

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“e-credit note” means a credit note as contemplated in section 21, that-

 

(a)     is issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing; and

 

(b)     complies with such further requirements as the Minister may prescribe by Regulation;

[Definition of “e-credit note” inserted by section 11(a) of Act 4 of 2026]

“Temporarily applied” definition of section 18D of VAT Act

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(b)     “temporarily applied” means the application of fixed property or a portion of a fixed property in supplying accommodation in a dwelling under an agreement or more than one agreement for letting and hiring thereof which agreement or agreements relate to a combined total period not exceeding 12 months: Provided that “temporarily applied” does not include the application of fixed property in supplying accommodation in a dwelling under an agreement for the letting and hiring thereof where any such agreement is for a fixed period exceeding 12 months, in which case this section will not apply, but the provisions of section 18(1) shall apply.

 

(2)     Notwithstanding the provisions of section 18(1), where goods being supplied consist of fixed property consisting of any dwelling and such fixed property—

 

(a)     is developed by a vendor who is a developer wholly for the purpose of making taxable supplies or is held or applied for that purpose by that vendor; and

 

(b)     is subsequently temporarily applied by that vendor in accordance with section 12(c),

 

such fixed property shall be deemed to have been supplied by that vendor by way of a taxable supply for the consideration contemplated in section 10(29) and shall take place in accordance with section 9(13).

 

(3)     Where a vendor who is a developer subsequently supplies fixed property contemplated in subsection (2) by way of a sale within the period that the fixed property is temporarily applied, such supply shall be a taxable supply in the course or furtherance of the vendor’s enterprise and shall take place in accordance with section 9(3)(d).

[Subsection (3) substituted by section 43(1)(a) of Act 5 of 2026 effective on 1 April, 2026]

 

(4)     Where fixed property contemplated in subsection (3) is supplied by that vendor, the supply shall be deemed to be made for a consideration as contemplated in section 10(2).

 

(5)      Where fixed property-

 

(a)     contemplated in subsection (3) is supplied by that vendor within the “temporarily applied” period; or

[Paragraph (a) substituted by section 50(1)(a) of Act 17 of 2023 effective on 1 April, 2024]

 

(b)     is temporarily applied as contemplated in subsection (2) and is no longer applied in supplying accommodation in a dwelling immediately after the expiry of the “temporarily applied” period; or

[Paragraph (b) substituted by section 50(1)(b) of Act 17 of 2023 and by section 43(1)(b) and (c) of Act 5 of 2026 effective on 1 April, 2026]

 

(c)     . . . . . .

[Paragraph (c) substituted by section 30(1) of Act 20 of 2022 and deleted by section 50(1)(c) of Act 17 of 2023 effective on 1 April, 2024]

 

(d)     is deemed to have been supplied under section 18(1) in circumstances contemplated in subsection (6),

[Paragraph (d) added by section 43(1)(d) of Act 5 of 2026 effective on 1 April, 2026]

 

the Commissioner shall allow such vendor a deduction in terms of section 16(3)(o), and the deduction so made shall be deemed for the purpose of that section to be input tax.

 

(6)     The fixed property contemplated in subsection (2) shall be deemed to have been supplied by the developer by way of a taxable supply under section 18(1) for a consideration as contemplated in section 10(7) in the course or furtherance of that vendor’s enterprise at the earlier of-

 

(a)     the time that the temporary letting period of 12 months has been exceeded; or

 

(b)     the time that the vendor applies that fixed property permanently for a purpose other than that of making taxable supplies:

 

Provided that this provision shall not apply if, during the period that the property is “temporarily applied”, a written agreement for the taxable supply of the property has been concluded and the transfer of that property only occurs after the expiry of the said period. In such a case, the sale of the property concerned will be a taxable supply at the time contemplated in section 9(3)(d).

[Subsection (6) added by section 50(1)(d) of Act 17 of 2023 effective on 1 April, 2024]

[Section 18D inserted by section 54(1) of Act 20 of 2021 effective on 1 April, 2022]

“Developer” definition of section 18D of VAT Act

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(1)    For the purposes of this section-

(a)    “developer” means a vendor who continuously or regularly constructs, extends or substantially improves fixed property consisting of any dwelling or continuously or regularly constructs, extends or substantially improves parts of that fixed property for the purpose of disposing of that fixed property after the construction, extension or improvement; and