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

“Intermediary” definition of section 1 of VAT Act

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“intermediary” means a person who facilitates the supply of electronic services supplied by the electronic services supplier and who is responsible for issuing the invoices and collecting payment for the supply;

[Definition of “intermediary” inserted by section 8(1)(b) of Act 21 of 2018 effective on 1 April, 2019 and applicable in respect of supplies made on or after that date]

“Implementing agency” definition of section 1 of VAT Act

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“implementing agency” means-

(a)     the government of the Republic in the national, provincial or local sphere; or

(b)     any institution or body established and appointed by a foreign government, as contemplated in section 10(1)(bA)(ii) of the Income Tax Act; or

(c)     any person who has entered into a contract directly with the party contemplated in paragraph (a) or (b),

to implement, operate, administer or manage a foreign donor funded project;

[Definition of “implementing agency” inserted by section 66(1)(c) of Act 34 of 2019 effective on 1 April, 2020]

Section 18C (VAT) – Adjustments for leasehold improvements

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18C. Adjustments for leasehold improvements

 

Where goods have been supplied to a vendor, being a lessor, as contemplated in section 8(29), the lessor shall be deemed to have made a taxable supply in the course or furtherance of the lessor’s enterprise, and where a deduction of input tax would have been denied in terms of section 17(2), or to the extent that such goods are not wholly for consumption, use or supply in the course of making taxable supplies by that lessor, those goods shall be deemed to be supplied by the lessor at the time the leasehold improvements are completed, in accordance with the formula-

 

A × B × C

 

in which formula—

 

“A”     represents the tax fraction;

 

“B”    represents the amount stipulated in the agreement or if no amount is stipulated, the open market value as stipulated in section 3 applies, and

 

“C”    represents the percentage of the use or application of the goods for the purposes of making other than taxable supplies at the time the leasehold improvements are completed.

[Section 18C inserted by section 84(1) of Act 17 of 2017 effective on 1 April 2018]

“Outbound insurance policy” definition of section 1 of VAT Act

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“outbound insurance policy” means a travel policy which provides insurance cover in respect of a passenger transported from the Republic to a destination in an export country or from a place outside the Republic to another destination outside the Republic as part of an international journey;

[Definition of “outbound insurance policy” inserted by section 77(1)(d) of Act 17 of 2017 and substituted by section 89(c) of Act 23 of 2018]

“International journey” definition of section 1 of VAT Act

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“international journey” means a journey commencing from the “point of departure” in the Republic to a destination outside the Republic (and vice versa), including (where applicable) stopovers en route to the destination, time spent in the destination country and the return journey;

[Definition of “international journey” inserted by section 77(1)(c) of Act 17 of 2017 and substituted by section 89(b) of Act 23 of 2018]

“Inbound insurance policy” definition of section 1 of VAT Act

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“inbound insurance policy” means a travel policy which provides insurance cover in respect of a passenger transported from an export country into the Republic or between two places in the Republic as part of an international journey;

[Definition of “inbound insurance policy” inserted by section 77(1)(b) of Act 17 of 2017 and substituted by section 89(a) of Act 23 of 2018]

Subsections 2 and 3 of section 78A of VAT Act

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(2)     Where a person is deregistered in terms of the Sixth Schedule to the Income Tax Act and registers as a vendor, any supplies of goods or services-

 

(a)     made by that person before it became a vendor;


(b)     in respect of which the time of supply would have been deemed to have taken place while that person was a registered micro business had it been registered as a vendor during that time;


(c)     which were not included in the taxable turnover of that person while it was a registered micro business; and


(d)     the receipts for which are received after it became a vendor,


must be deemed to be made in the course or furtherance of that vendor’s enterprise in the tax period in which those receipts are received.

(3)     Subject to section 18(4)(b), where a person is deregistered in terms of the Sixth Schedule to the Income Tax Act and registers as a vendor, any value-added tax paid on expenditure it incurred while it was a registered micro business may not be deducted by that vendor as input tax.

[Section 78A inserted by section 115 of Act 60 of 2008 effective on 1 March 2009