Category: PART IV – RETURNS, PAYMENTS AND ASSESSMENTS (VAT)

Section 31 (VAT) – Assessments

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31. Assessments

(1)     The Commissioner may make an assessment of the amount of tax payable by-

(a)     ………

(b)     ………

(c)     ………


(d)     any person, not being a vendor, that supplies goods or services and represents that tax is charged on that supply; or

(e)     any vendor that supplies goods or services and such supply is not a taxable supply or such supply is a taxable supply in respect of which tax is chargeable at a rate of zero per cent, and in either case that vendor represents that tax is charged on such supply at a rate in excess of zero per cent;

(f)     any person who holds himself or herself out as a person entitled to a refund or who produces, furnishes, authorises, or makes use of any tax invoice or document or debit note and has obtained any undue tax benefit or refund under the provisions of any regulation referred to in paragraph (d) of the definition of ‘exported’ in section 1, to which such person is not entitled.

[Paragraph (f) substituted by section 28 of Act 44 of 2014 effective on 20 January 2015]

[Subsection (1) amended by section 180 of Act 45 of 2003, section 41 of Act 34 of 2004, section 38 of Act 32 of 2005 and section 87 of Act 20 of 2006 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(2)     For the purposes of subsection (1), the person liable for the payment of any amount of tax assessable by the Commissioner shall be-

(a)     ……….

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

(b)     where the provisions of section 29 are applicable-

(i)      the seller referred to in that section, unless the provisions of subparagraph (ii) are applicable; or

(ii)   the owner referred to in that section, if the said seller holds a written statement contemplated in section 8(1)(b) furnished by the said owner and that written statement is incorrect; or

(c)     where subsection (1) (d) is applicable, the person referred to in that provision; or

(d)     where subsection (1) (e) is applicable, the vendor referred to in that provision.

(3)     ……….

[Subsection (3) deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(4)     The Commissioner must give a notice of assessment, and-

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

(a)     where the assessment is made on a seller referred to in subsection 2 (b) (i), send a copy of that notice of assessment to the owner referred to in that subsection; or

(b)     where the assessment is made on an owner referred to in subsection (2) (b) (ii), send a copy of that notice of assessment to the seller referred to in that subsection.

(5)     ……….

[Subsection (5) deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(6)     For the purposes of this section, Part II, Part VI and sections 58, 59, 60 and 61–

(a)     the person referred to in subsection (1) (d) shall be deemed to be a vendor; and

(b)     any tax represented to be charged on any supply referred to in subsection (1) (d) or (1) (e) shall be deemed to be tax payable by the vendor concerned and the amount thereof as assessed under this section shall be paid within the period allowed by the Commissioner.

Section 29 (VAT) – Special returns

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29. Special records and payments

Where goods are deemed by section 8(1) to be supplied in the course of an enterprise the person selling the goods (hereinafter referred to as the seller), whether or not the seller is a vendor, shall, within the period of 30 days after the date on which the sale was made-

(a)     obtain and retain the following information in the manner prescribed by the Commissioner:


(i)      the name and address of the seller and, if registered as a vendor, his or her VAT registration number;


(ii)     the name and address of the person whose goods are sold (hereinafter referred to as the owner) and, if the owner is registered under this Act, the VAT registration number of the owner;


(iii)    the date of the sale;


(iv)    the description and quantity of the goods sold; and


(v)     the selling price of the goods and the amount of tax charged in respect of the supply of goods under the sale, being the tax leviable in respect of such supply under section 7(1)(a);

[Paragraph (a) amended by section 49 of Act 16 of 2004 and by section 271 read with paragraph 122 of Schedule 1 of Act 28 of 2011 and substituted by section 10(b) of Act 22 of 2018]

(b)     pay to the Commissioner the amount of tax so charged; and


(c)     send or deliver to the owner a copy of the document reflecting the information referred to in paragraph (a),

[Paragraph (c) substituted by section 10(c) of Act 22 of 2018]

and the seller and the owner shall exclude from any return which the seller or owner is required to furnish under section 28 the tax charged on the supply of goods under the sale contemplated in this section.

[Section 29 amended by section 10(a) and(d) of Act 22 of 2018]

30. ……….

[Section 30 repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

Section 28 (VAT) – Returns and payments of tax

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28. Returns and payments of tax

(1)     Every vendor shall, within the period ending on the twenty-fifth day of the first month commencing after the end of a tax period relating to such vendor or, where such tax period ends on or after the first day and before the twenty-fifth day of a month, within the period ending on such twenty-fifth day-

[Words preceding paragraph (a) substituted by section 41 of Act 61 of 2008 and section 31 of Act 21 of 2012 effective on 20 December 2012]

(a)     furnish the Commissioner with a return reflecting such information as may be required for the purpose of the calculation of tax in terms of section 14 or 16; and

[Paragraph (a) substituted by section 37 of Act 32 of 2005 and section 31 of Act 8 of 2010 effective on 2 November 2010]

(b)     calculate the amounts of such tax in accordance with the said section and pay the tax payable to the Commissioner or calculate the amount of any refund due to the vendor:

Provided that-


(i)                ……….

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

(ii)     where payment of the full amount of the tax is effected by means of a debit order and the requirements for the transfer of the tax have been met by the vendor, such debit order shall not be effected prior to the last business day of the month during which the said twenty-fifth day falls and the period within which the tax is required to be paid shall be deemed to end on the last business day of such month;

[Subparagraph (ii) substituted by section 32 of Act 36 of 2007]

(iii)    a vendor registered with the Commissioner to submit returns electronically is deemed to have submitted the return and made payment within the period contemplated in subsection (1) if the vendor submits the returns and makes full payment of the amount of tax electronically in the prescribed form and manner within the period ending on the last business day of the month during which that twenty-fifth day falls;

[Subparagraph (iii) substituted by section 32 of Act 36 of 2007, section 271 of Act 28 of 2011 effective on 1 October 2012 and section 31 of Act 21 of 2012 effective on 20 December 2012]

(2)     Every vendor who is registered in terms of the provisions of Part III shall within the period allowed by subsection (1) of this section furnish the return referred to in that subsection in respect of each tax period relating to such vendor, whether or not tax is payable or a refund is due in respect of such period.

Section 27 (VAT) – Tax period

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27. Tax period

(1)     For the purposes of this section-

“Category A” means the category of vendors whose tax periods are periods of two months ending on the last day of the months of January, March, May, July, September and November of the calendar year;


“Category B” means the category of vendors whose tax periods are periods of two months ending on the last day of the months of February, April, June, August, October and December of the calendar year;


“Category C” means the category of vendors whose tax periods are periods of one month ending on the last day of each of the 12 months of the calendar year;


“Category D” means the category of vendors whose tax periods are periods of six months ending on the last day of February and August of the calendar year or, where any vendor falling within this category makes written application therefor, on the last day of such other months as the Commissioner may approve;


“Category E” means the category of vendors whose tax periods are periods of twelve months ending on the last day of their “year of assessment” as defined in section 1 of the Income Tax Act or where any vendor falling within this category makes written application therefor, on the last day of such other month as the Commissioner may approve.

[Definition of “Category E” added by section 78 of Act 30 of 2000]

“Category F” ……….

[Definition of “Category F” added by section 11 of Act 10 of 2005 and deleted by section 28 of Act 44 of 2014 effective on 1 July 2015]

(2)

(a)     Every vendor, not being a vendor who falls within Category C, D or E as contemplated in subsection (3), (4) or (4A), shall fall within Category A or Category B.

[Paragraph (a) substituted by section 78 of Act 30 of 2000, section 11 of Act 10 of 2005 and section 28 of Act 44 of 2014 effective on 1 July 2015]


(b)     The Commissioner shall determine whether such vendor falls within Category A or Category B and notify the vendor accordingly.


(c)     The determinations made by the Commissioner under paragraph (b) shall be made so as to ensure that approximately equal numbers of vendors fall within Category A and Category B.


(d)     The Commissioner may from time to time direct that any vendor falling within Category A shall, with effect from the commencement of a future period, fall within Category B, or vice versa.

(3)     A vendor shall fall within Category C if-

(a)     the total value of the taxable supplies of the vendor (including the taxable supplies of any branches, divisions or separate enterprises of the vendor registered as separate vendors under section 50(2))-


(i)      has in the period of 12 months ending on the last day of any month of the calendar year exceeded R30 million; or


(ii)     is likely to exceed that amount in the period of 12 months beginning on the first day of any such month; or

[Paragraph (a) amended by section 34 of Act 136 of 1991]


(b)     the vendor has applied in writing for the tax periods in his case to be on a monthly basis; or


(c)     the vendor has repeatedly made default in performing any of his obligations in terms of this Act,


and the Commissioner has directed that, with effect from the commencement date or such later date as may be appropriate, the vendor shall fall within Category C: Provided that a vendor falling within Category C shall cease to fall within that Category with effect from the commencement of a future period notified by the Commissioner, if the vendor has applied in writing to be placed within Category A, B, D or E and the Commissioner is satisfied that by reason of a change in the vendor’s circumstances he satisfies the requirements of this section for placing within Category A, B, D or E.

[Words following paragraph (c) substituted by section 28 of Act 44 of 2014 effective on 1 July 2015]

[Subsection (3) amended by section 78 of Act 30 of 2000 and section 11 of Act 10 of 2005]

(4)     A vendor shall fall within Category D if-

(a)

(i)      the vendor’s enterprise consists solely of agricultural, pastoral or other farming activities or the vendor is a branch, division or separate enterprise which is deemed by subsection (5) of section 23 to be a separate person for the purposes of that section and is as such registered under that section or the vendor is a branch, division or a separate enterprise registered as a separate vendor under section 50(2);


(ii)     the activities of any such branch, division or separate enterprise consist solely of agricultural, pastoral or other farming activities and activities of that kind are not carried on in any other branch, division or separate enterprise of the vendor or the association not for gain, as the case may be, by whom a written application referred to in subparagraph (v) is made;


(ii)     the total value of the taxable supplies of the vendor from agricultural, pastoral or other farming activities-


(aa)   has in the period of 12 months ending on the last day of any month of the calendar year not exceeded R1,5 million; and


(bb)   is not likely to exceed that amount in the period of 12 months commencing at the end of the period referred to in item (aa);


(iv)  the vendor does not fall within Category C; and


(v)     the vendor whose enterprise consists solely of agricultural, pastoral or other farming activities or the vendor referred to in section 50(2) or the association not for gain referred to in section 23(5), as the case may be, has made a written application to the Commissioner, in such form as the Commissioner may prescribe, for such first-mentioned vendor or the branch, division or separate enterprise in question, as the case may be, to be placed within Category D; or

(b)     the vendor is a micro business that is registered in terms of the Sixth Schedule to the Income Tax Act and has made written application in such form as the Commissioner may prescribe, to be placed in Category D,


and the Commissioner has directed that, with effect from the commencement date or such later date as may be appropriate, the vendor shall fall within Category D: Provided that a vendor falling within Category D shall cease to fall within that Category with effect from the commencement of a future period notified by the Commissioner, if written application is made by the person who made the application referred to in subparagraph (v) for the vendor to be placed within Category A, B, C or E or the Commissioner is satisfied that by reason of a change in circumstances that vendor should be placed within Category A, B, C or E.

[Words following paragraph (b) substituted by section 28 of Act 44 of 2014 effective on 1 July 2015]

[Subsection (4) amended by section 34 of Act 136 of 1991, section 78 of Act 30 of 2000, section 11 of Act 10 of 2005 and section 50 of Act 9 of 2006 and substituted by section 30 of Act 21 of 2012 effective on 1 March 2014]

(4A)  A vendor shall fall within Category E if-

(a)     the vendor is a company or a trust fund;


(b)     the vendor’s enterprise consists solely of one or more of the activities of-


(i)    letting of fixed property or the renting of movable goods to; or


(ii)   the administration or management of,


companies which are connected persons in relation to the vendor;


(c)     the recipients of those supplies are all registered vendors and are entitled to deductions of the full amount of tax in respect of those supplies;


(d)     tax invoices are issued once a year and payments of consideration for these supplies, by agreement between the parties, only become due once a year at the end of the “year of assessment” as defined in section 1 of the Income Tax Act of the vendor making the supplies; and


(e)     the vendor has made written application to the Commissioner in such form as the Commissioner may prescribe, to be placed in Category E,


and the Commissioner has directed that, with effect from a date which he considers appropriate, the vendor shall fall within Category E, provided that a vendor falling within Category E shall cease to fall within that Category with effect from a date notified by the Commissioner if-


(i)      written application is made by the person who made the application referred to in paragraph (e) for the vendor to be placed in a different Category; or


(ii)     the Commissioner is satisfied that by reason of a change in circumstances, that vendor should be placed in Category A, B, C or D; or

[Paragraph (ii) substituted by section 11 of Act 10 of 2005 and section 28 of Act 44 of 2014 effective on 1 July 2015]


(iii)  the vendor’s placing in Category E results in any financial loss (including any loss of interest) to the State.

[Subsection (4A) inserted by section 78 of Act 30 of 2000]

(4B) ……….

[Subsection (4B) inserted by section 11 of Act 10 of 2005, amended by section 50 of Act 9 of 2006 and deleted by section 28 of Act 44 of 2014 effective on 1 July 2015]

(5)     For the purposes of subsection (3)(a) and subsection (4)(a)(iii)-

[Words preceding paragraph (a) substituted by section 22 of Act 39 of 2013 effective on 1 March 2014]

(a)     the provisions of this Act relating to the determination of the value of any supply of goods or services, whether such supply is made before or on or after the commencement date, shall apply for the purposes of this paragraph, but no regard shall be had to any tax charged in respect of such supply; and


(b)     the total value of the taxable supplies of a vendor within any period of 12 months referred to in subsection (3)(a) or (4)(a)(iii) shall not be deemed to have exceeded or be likely to exceed the amount referred to in subsection (3)(a) or the amount referred to in subsection (4)(a)(iii), as the case may be, where that total value exceeds or is likely to exceed that amount, as the case may be, solely as a consequence of-

[Words preceding item (i) substituted by section 25 of Act 4 of 2008 effective on 1 March 2008 and section 22 of Act 39 of 2013 effective on 1 March 2014]

(i)      any cessation of, or any substantial or permanent reduction in the size or scale of, any enterprise carried on by the vendor; or


(ii)     the replacement of any plant or other capital asset used in any enterprise carried on by the vendor; or


(iii)  abnormal circumstances of a temporary nature.

[Paragraph (b) amended by section 50 of Act 9 of 2006]

(6)     The tax periods applicable under this Act to any vendor shall be the tax periods applicable to the Category within which the vendor falls as contemplated in this section: Provided that-

(i)      the first such period shall commence on the commencement date or, where any person becomes a vendor on a later date, such later date;


(ii)     any tax period ending on the last day of a month, as applicable in respect of the relevant Category, may, instead of ending on such last day, end on a fixed day approved by the Commissioner, which day shall fall within 10 days before or after such last day: Provided that the future tax period so approved by the Commissioner must be used by the vendor for a minimum period of 12 months commencing from the tax period the change is made;


(iii)    the first day of any tax period of the vendor subsequent to the vendor’s first tax period shall be the first day following-


(a)    the last day of the vendor’s preceding tax period; or


(b)   the fixed day as approved by the Commissioner in terms of paragraph (ii).

[Subsection (6) amended by section 28 of Act 136 of 1992 and section 78 of Act 30 of 2000 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]