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

Section 68 (VAT) – Tax relief allowable to certain diplomats and diplomatic and consular missions

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68. Tax relief allowable to certain diplomats and diplomatic and consular missions

(1)     The Minister may, with the concurrence of the Cabinet member responsible for international relations and cooperation, authorize the granting of relief, by way of a refund, in respect of value-added tax paid or borne-

[Words preceding paragraph (a) substituted by section 86 of Act 17 of 2017 effective on 18 December 2017]

(a)     by any person enjoying full or limited immunity, rights or privileges under sections 3, 4, 5 and 6 of the Diplomatic Immunities and Privileges Act, 2001 (Act No. 37 of 2001), or under an agreement or otherwise as contemplated in section 7 of that Act or under the recognized principles of international law; or

[Paragraph (a) substituted by section 39 of Act 136 of 1992, section 26 of Act 20 of 1994 and section 107 of Act 32 of 2004]

(b)     by any diplomatic or consular mission of a foreign country established in the Republic, relating to transactions concluded for the official purposes of such mission.

[Paragraph (b) substituted by section 26 of Act 20 of 1994]

(2)     The relief contemplated in subsection (1) (a) shall not be granted to any South African citizen or permanent resident of the Republic.

(3)     The Minister may authorize any relief under this section on such conditions and subject to such restrictions as he may deem fit.

(4)     Any claim for a refund of tax under this section shall be made in such form and at such time as the Commissioner may prescribe and shall be accompanied by such proof of payment of tax or certification as the Commissioner may require.

69. ……….

[Section 69 amended by section 44 of Act 136 of 1991, section 40 of Act 136 of 1992 and section 42 of Act 97 of 1993 and repealed by section 27 of Act 20 of 1994]

70. ……….

[Section 70 amended by section 120 of Act 74 of 2002 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

71. ……….

[Section 71 repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

Section 67A (VAT) – Application of increased or reduced tax rate

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67A.    Application of increased or reduced tax rate

(1)     Subject to the provisions of subsection (3), where-

(a)     goods are provided before the date on which an increase or decrease in the rate of tax leviable under section 7(1)(a) becomes effective in respect of the supply of such goods or the date on which the tax is imposed or withdrawn in respect of the supply of such goods; or

[Paragraph (a) substituted by section 31 of Act 37 of 1996]

(b)     goods are provided in respect of a supply contemplated in section 9 (3) (a) or (b) during a period beginning before and ending before, on or after the said date; or

(c)     services are performed during a period beginning before and ending before, on or after the date on which an increase or decrease in the rate of tax leviable under section 7(1)(a) becomes effective in respect of the supply of such services or the date on which the tax is imposed or withdrawn in respect of the supply of such services,

[Paragraph (c) substituted by section 31 of Act 37 of 1996]

and the supply of such goods or services, as the case may be, is in terms of section 9 deemed to be made on or after the said date, then-

(i)      in the case of the increase or decrease in the rate of the tax on the said date, the tax payable in respect of the supply of the goods referred to in paragraph (a) or the supply of the goods referred to in paragraph (b) which are provided during a period referred to in that paragraph which expires before the said date or the supply of services referred to in paragraph (c) which are performed during a period referred to in that paragraph which expires before the said date, shall be determined at the rate applicable on the day before the said date or, in the case of the imposition of the tax on the said date, any such supply of goods or services, as the case may be, shall be deemed not to be subject to such tax or, in the case of the withdrawal of the tax on the said date, any such supply of goods or services, as the case may be, shall be deemed to be subject to such tax as if such tax had not been withdrawn; and

[Paragraph (i) substituted by section 31 of Act 37 of 1996]

(ii)     where the period referred to in paragraph (b) or the period referred to in paragraph (c) expires on or after the said date, the value of the supply in respect of the period in question shall, on the basis of a fair and reasonable apportionment, be deemed to consist of a part (hereinafter referred to as the first part) relating to the provision of the goods or the performance of the services, as the case may be, before the said date and a part (hereinafter referred to as the second part) relating to the provision of the goods or the performance of the services, as the case may be, on or after the said date, and, in the case of the increase or decrease in the rate of the tax on the said date, the tax payable in respect of each part shall be separately determined, the tax in respect of the first part being determined at the rate applicable on the day before the said date and the tax in respect of the second part at the rate applicable on the said date or, in the case of the imposition of the tax on the said date, the first part shall be deemed not to be subject to such tax or, in the case of the withdrawal of the tax on the said date, the first part shall be deemed to be subject to such tax as if such tax had not been withdrawn:

[Paragraph (ii) substituted by section 31 of Act 37 of 1996]

Provided that this subsection shall not apply in respect of any sale of fixed property.

(2)     Subject to the provisions of subsection (3), where goods or services would in terms of section 9 be deemed to be supplied at a time within the period commencing on the date of the announcement of an increase in the rate of tax leviable in terms of section 7(1)(a) and ending on the day before the date on which the increase in the rate of tax becomes effective, that supply shall, to the extent to which it consists of the provision of goods on or after the day following the last day of the period of 21 days after the date on which the increase of the rate becomes effective, or the performance of services on or after the date on which the increase of the rate becomes effective, be deemed not to take place at the said time, but on the date on which the increase in the rate becomes effective: Provided that this subsection shall not apply where the supply takes place-

(i)      in consequence of any payments customarily made or becoming due or invoices customarily issued, when made, becoming due or issued at regular intervals for the provision of goods or the performance of services still to be provided or performed; or

(ii)     under any written agreement referred to in subsection (4).

[Subsection (2) amended by section 41 of Act 97 of 1993]

(3)     For the purposes of subsections (1) and (2) goods shall be deemed to be provided by the supplier thereof when such goods are delivered to the recipient and goods supplied under a rental agreement shall be deemed to be provided to the recipient when he takes possession or occupation thereof: Provided that where goods consist of fixed property supplied by way of a sale and transfer thereof is effected by registration in a deeds registry, that property shall for the purposes of this subsection be deemed to be delivered to the recipient when such registration is effected.

(4)     Subject to the provisions of section 78(9), where, before the date on which an increase in the rate of tax leviable in terms of section 7(1)(a) becomes effective, a written agreement is concluded for-

(a)     the sale of fixed property consisting of any dwelling together with land on which it is erected, or of any real right conferring a right of occupation of a dwelling or of any unit as defined in section 1 of the Sectional Titles Act, 1986 (Act No. 95 of 1986), such unit being a dwelling, or of any share in a share block company which confers a right to or an interest in the use of a dwelling; or

(b)     the sale of fixed property consisting of land, or of any real right conferring a right of occupation of land for the sole or principal purpose of the erection by or for the purchaser of a dwelling or dwellings on the land, as confirmed by the purchaser in writing; or

(c)     the construction by any vendor carrying on a construction enterprise of any new dwelling,

and-

(i)      the price in respect of the sale or construction in question was determined and stated in the said agreement, as in force before the said date, and that agreement was signed by the parties thereto before the said date; and

(ii)     the supply of such fixed property or services under the said agreement is in terms of section 9 deemed to take place on or after the said date,

the rate at which tax is in terms of the said section 7(1)(a) leviable in respect of that supply, shall be the rate at which tax would have been levied had the supply taken place on the date on which such agreement was concluded.

(5)     Where-

(a)     goods are sold in terms of a lay-by agreement as contemplated in section 8(4)(a); or

(b)     a service is supplied in relation to the said agreement as contemplated in section 8(4)(b),

and such agreement is concluded before the date on which an increase of the rate of tax leviable in terms of section 7(1)(a) becomes effective and the deposit referred to in the said section 8(4)(a) was paid before that date, the rate at which tax is in terms of the said section 7(1)(a) leviable in respect of that supply, shall be the rate at which tax would have been levied had the supply taken place on the date on which such agreement was concluded.

[Subsection (5) added by section 41 of Act 97 of 1993]

[Section 67A inserted by section 6 of Act 61 of 1993]

Section 67 (VAT) – Contract price or consideration may be varied according to rate of value-added tax

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67. Contract price or consideration may be varied according to rate of value-added tax

 

(1)     Whenever the value-added tax is imposed for the first time in terms of this Act or the rate of tax applicable under section 7(1) is increased in respect of any supply of goods or services in relation to which any agreement was entered into by the acceptance of an offer made before the tax was imposed for the first time in terms of this Act or the rate of tax applicable under section 7(1) was increased, as the case may be, the vendor may, unless agreed to the contrary in any agreement in writing and notwithstanding anything to the contrary contained in any law, recover from the recipient, as an addition to the amounts payable by the recipient to the vendor, a sum equal to any amount payable by the vendor by way of the said tax or increase, as the case may be, and any amount so recoverable by the vendor shall, whether it is recovered or not, be accounted for by the vendor under the provisions of this Act as part of the consideration in respect of the said supply.

[Subsection (1) substituted by section 38 of Act 136 of 1992, section 30 of Act 37 of 1996 and section 104 of Act 43 of 2014 effective on 1 April 2015]

 

(2)     Whenever the value-added tax is withdrawn or the rate of tax applicable under section 7(1) is decreased in respect of any supply of goods or services in relation to which any agreement was entered into by the acceptance of an offer made before the tax was withdrawn or the rate of tax applicable under section 7(1) was decreased, as the case may be, the vendor shall, unless agreed to the contrary in any agreement in writing and notwithstanding anything to the contrary contained in any law, reduce the amount payable to the vendor by the recipient by way of any consideration in which the amount of such tax was included, by a sum equal to the amount of the tax withdrawn or the amount by which the rate of tax applicable under section 7(1) was decreased, as the case may be.

[Subsection (2) substituted by section 30 of Act 37 of 1996 and section 104 of Act 43 of 2014 effective on 1 April 2015]

 

(3)     Whenever the value-added tax is imposed for the first time in terms of this Act or withdrawn or the rate of tax applicable under section 7(1) is increased or decreased, as the case may be, in respect of any supply of goods or services subject to any fee, charge or other amount (whether it is a fixed, maximum or minimum fee, charge or other amount) prescribed by, or determined pursuant to, any Act or by any regulation or measure having the force of law, that fee, charge or other amount may be increased or shall be decreased, as the case may be, by the amount of tax or additional tax charged or chargeable or the amount of tax no longer charged or chargeable, as the case may be: Provided that this subsection shall not apply to any fee, charge or other amount if such fee, charge or other amount has been altered in any Act, regulation or  measure prescribing or determining such fee, charge or other amount to take account of any imposition of tax for the first time in terms of this Act or withdrawal of such tax or increase or decrease in the rate of tax applicable under section 7(1): Provided further that this subsection shall not be construed so as to permit any further increase or require a further decrease, as the case may be, in a fee, charge or other amount referred to in this subsection, where such fee, charge or other amount is calculated as a percentage or fraction of another amount which represents the consideration in money for a taxable supply of goods or services, other than a taxable supply charged with tax at the rate or zero per cent or a supply which is an exempt supply.

[Subsection (3) added by section 43 of Act 136 of 1991 and amended by section 38 of Act 136 of 1992 and section 104 of Act 43 of 2014 effective on 1 April 2015]

Section 66 (VAT) – Rounding-off of the tax

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66. Rounding-off of tax

In determining an amount of tax under this Act—

(a) where the tax fraction is expressed as—

(i) a proportion, that proportion may not be rounded off to fewer than five decimal places namely0,13043; or

(ii) a percentage, that percentage may not be rounded off to fewer than three decimal places,namely 13,043; and

(b) fractions of—

(i) less than half a cent, must be rounded down to the last cent; or

(ii) half a cent or more, must be rounded up to the next cent.

[Section 66 substituted by section 175 of Act 60 of 2001 and by section 13(1) of Act 21 of 2018 effective on 1 April 2018]

Section 65 (VAT) – Prices advertised or quoted to include tax

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65. Prices advertised or quoted to include tax

 

Any price advertised or quoted by any vendor in respect of any taxable supply of goods or services shall include tax and the vendor shall in his advertisement or quotation state that the price includes tax, unless the total amount of the tax chargeable under section 7(1)(a), the price excluding tax and the price inclusive of tax for the supply are advertised or quoted by the vendor: Provided that-

 

(i)      where the price inclusive of tax and the price excluding tax for a supply are advertised or quoted, both prices shall be advertised or quoted with equal prominence and impact;

(ii)     price tickets on goods need not state that the prices include tax if this is stated by way of a notice prominently displayed at all entrances to the premises in which the enterprise is carried on and at all points in such premises where payments are effected;

(iii)    the Commissioner may in the case of any vendor or class of vendors approve any other method of displaying prices of goods or services by such vendor or class of vendors or, where the rate of tax is increased or reduced, the date on which the increased or reduced rate of tax takes effect;

[Paragraph (iii) substituted by section 103 of Act 43 of 2014 effective on 1 April 2015]

(iv)    a vendor may not state or imply that any form of trade, cash or any other form of discount or refund is in lieu of the tax chargeable in terms of section 7(1)(a).

[Paragraph (iv) added by section 174 of Act 60 of 2001]

[Section 65 amended by section 37 of Act 136 of 1992]

Section 64 (VAT) – Prices deemed to include tax

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64. Prices deemed to include tax

 

(1)     Any price charged by any vendor in respect of any taxable supply of goods or services shall for the purposes of this Act be deemed to include any tax payable in terms of section 7(1)(a) in respect of such supply; whether or not the vendor has included tax in such price.

 

(2)     The amount of any deposit payable to or refundable by a vendor in respect of a returnable container shall be deemed to include tax.

[Section 64 substituted by section 36 of Act 136 of 1992]

Section 61 (VAT) – Recovery of tax from recipient

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61. Recovery of tax from recipient

(1)     Where in respect of any supply made by a vendor, the vendor has, in consequence of any fraudulent action or any misrepresentation by the recipient of the supply, incorrectly applied a rate of zero per cent or treated such supply as being exempt from tax, the Commissioner may, notwithstanding anything to the contrary contained in this Act, raise an assessment upon the recipient for the amount of tax payable, together with any interest and penalty that has become payable in terms of Chapter 12, 15 or 16 of the Tax Administration Act, as the case may be, in respect of such amount.

[Subsection (1) substituted by section 28 of Act 37 of 1996 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(2)     ……….

[Subsection (2) deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(3)     This section shall not be construed as preventing the Commissioner from recovering the amounts of unpaid tax, penalty and interest from the vendor, but in the event of such amounts being recovered from the recipient the vendor shall be absolved from liability for the payment of the amounts due.


62. ……….

[Section 62 amended by section 103 of Act 30 of 1998 and section 105 of Act 53 of 1999 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

63. ……….

[Section 63 amended by section 29 of Act 37 of 1996 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

Section 58 (VAT) – Offences

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58  Offences

(1)     Any person who-

(a)     being an auctioneer or supplier of goods or services wilfully—

(i)      declares to any person to whom goods or services are supplied by such auctioneer or supplier that tax has been included in, or will be added to, the price or amount chargeable in respect of such supply, where in fact no tax is payable in terms of this Act;

(ii)     includes in, or adds to, the price or amount charged to the recipient in relation to such supply any tax, where in fact no tax is payable in terms of this Act; or

(iii)    includes in, or adds to, the price or amount charged to the recipient in relation to such supply any tax in excess of the tax properly leviable under this Act in respect of the value of such supply; or

(b)     wilfully fails to comply with the provisions of paragraph (i) of the proviso to section 20(1) or item (A) of the proviso to section 21(3),

is guilty of an offence and is liable, upon conviction, to a fine or to imprisonment for a period not exceeding two years.

(2)      Any person who-

(a)     wilfully or negligently fails to comply with the provisions of section 14, 28(1) or (2) or 29;

(b)     wilfully or negligently contravenes the provisions of section 65; or

(c)     being an agent or an auctioneer as contemplated in section 54, wilfully or negligently fails to comply with any of the requirements of section 54(3) or the proviso to section 54(5),

is guilty of an offence and is liable, upon conviction, to a fine or to imprisonment for a period not exceeding two years.

[Section 58 amended section 41 of Act 136 of 1991, by section 39 of Act 97 of 1993, by section 25 of Act 46 of 1996, by section 102 of Act 53 of 1999, by section 72 of Act 19 of 2001, by section 173 of Act 60 of 2001, by section 119 of Act 74 of 2002, by section 43 of Act 34 of 2004, by section 42 of Act 32 of 2005, by section 41 of Act 18 of 2009, by section 142(1) of Act 24 of 2011 and by section 271 read with paragraph 142 of Schedule 1 of Act 28 of 2011 and substituted by section 21 of Act 24 of 2020]

59. ……….

[Section 59 amended by section 40 of Act 97 of 1993 and section 103 of Act 53 of 1999 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

60. ……….

 [Section 60 amended by section 50 of Act 27 of 1997 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

Section 55 (VAT) – Records

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55. Records

(1)     In addition to the records required under Part A of Chapter 4 of the Tax Administration Act, every vendor must, in particular, keep the following records and documents:

[Words preceding paragraph (a) substituted by section 271 of Act 271 of Act 28 of 2011 effective on 1 October 2012]

(a)     a record of all goods and services supplied by or to the vendor showing the goods and services, the rate of tax applicable to the supply and the suppliers or their agents, in sufficient detail to enable the goods and services, the rate of tax, the suppliers or the agents to be readily identified by the Commissioner, and all invoices, tax invoices, credit notes, debit notes, bank statements, deposit slips, stock lists and paid cheques relating thereto: Provided that a vendor’s records do not have to show the rate of tax where the vendor has been authorised by the Commissioner to calculate the tax payable by him in accordance with a method prescribed by regulation, as contemplated in section 16(1);

[Paragraph (a) substituted by section 38 of Act 97 of 1993 and section 102 of Act 30 of 1998]


(aA)  a record of all importations of goods and documents relating thereto as contemplated in section 16(2)(d);

[Paragraph (aA) inserted by section 35 of Act 136 of 1992]


(aB)  any documentary proof required to be obtained and retained in accordance with section 16(2)(f) or (g);

[Paragraph (aB) inserted by section 37 of Act 36 of 2007 and substituted by section 29 of Act 16 of 2016 effective on 19 January 2017]


(b)     the charts and codes of account, the accounting instruction manuals and the system and programme documentation which describe the accounting system used in each tax period in the supply of goods and services;


(c)     any list required to be prepared in accordance with section 15 (9); and


(d)     any documentary proof required to be obtained and retained in accordance with section 11(3).

[Subsection (1) amended by section 38 of Act 97 of 1993]

(2)     ……….

[Subsection (2) substituted by section 38 of Act 97 of 1993 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(3)     ……….

[Subsection (3) substituted by section 38 of Act 97 of 1993, amended by section 17 of Act 10 of 2006 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(4)     ……….

[Subsection (4) substituted by section 38 of Act 97 of 1993, amended by section 18 of Act 9 of 2007 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]


56. ……….

[Section 56 repealed by section 23 of Act 46 of 1996]

57. ………..

 [Section 57 substituted by section 24 of Act 46 of 1996, amended by section 47 of Act 27 of 1997, section 172 of Act 60 of 2001 and section 187 of Act 45 of 2003 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]