Category: PART VI – PAYMENT, RECOVERY AND REFUND OF TAX (VAT)

Section 45A (VAT) – Calculation of interest payable under this Act

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45A.    Calculation of interest payable under this Act

 

Where-

 

(a)     any interest is payable under the provisions of section 36, 39 or 45;

 

(b)     the rate at which such interest is payable has with effect from any date been altered; and

 

(c)     such interest is payable in respect of any period or any number of months or any part of a month which commenced before the said date,

 

the interest to be determined in respect of that portion of such period which ended immediately before the said date or in respect of any such months or part of a month which commenced before the said date shall be calculated as if the said rate had not been so altered.

[Section 45A inserted by section 5 of Act 61 of 1993]

[Section 45A to be repealed by section 271 of Act 28 of 2011 with effect from a date determined by the President by proclamation in the Gazette]

Section 45 (VAT) – Interest on delayed refunds

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45. Interest on delayed refunds

 

(1)     Where the Commissioner does not within the period of 21 business days after the date on which the vendor’s return in respect of a tax period is received by an office of the South African Revenue Service refund any amount refundable in terms of section 44, interest shall be paid on such amount at the prescribed rate (but subject to the provisions of section 45A) and calculated for the period commencing at the end of the first-mentioned period to the date of payment of the amount so refundable: Provided that-

 

(i)      where such return made by the vendor is incomplete or defective in any material respect the said period of 21 business days shall be reckoned from the date on which-

 

(aa)   the vendor rectifies the return and satisfies the Commissioner in writing that the incompleteness or defectiveness of the return does not affect the amount refundable; or

[Subparagraph (aa) substituted by section 101(a) of Act 30 of 1998]

 

(bb)   information is received by the Commissioner to enable him to make an assessment upon the vendor reflecting the amount properly refundable to the vendor;

[Paragraph (i) substituted by section 43(a) of Act 27 of 1997 and amended by section 101(a) of Act 30 of 1998. Subparagraph (bb) substituted by section 101(a) of Act 30 of 1998]

 

(iA)   where the vendor is in default in respect of any of his obligations under this Act or any other Act administered by the Commissioner, to furnish a return as required by such Act, the said period of 21 business days shall be reckoned from the date on which any such outstanding return or returns furnished by the vendor as required by such Act are received by an office of the South African Revenue Service;

[Paragraph (iA) inserted by section 43 of Act 27 of 1997 and substituted by section 101 of Act 30 of 1998 and section 169 of Act 60 of 2001]

 

(ii)     where the Commissioner is prevented from satisfying himself as to the amount refundable in terms of section 44 by reason of not being able to gain access to the books and records of the vendor concerned after having, within a reasonable time, made a request by registered post, facsimile transmission, electronic means or personal delivery, to the vendor for access to such books and records during the period of 21 business days contemplated in this subsection, the said period of 21 business days shall be suspended from the date of despatch of such request by registered post, facsimile transmission, electronic means or the date of delivery of the personal delivery, until the date on which such access is granted;

[Paragraph (ii) substituted by section 101(b) of Act 30 of 1998 and by section 23(b) of Act 18 of 2023]

 

(iiA)  where the vendor-

 

(aa)  has not furnished the Commissioner with the particulars of the banking account of the enterprise; or

 

(bb)   has not notified the Commissioner that a refund or other amount be transferred to a bank account or an account with a similar institution other than that of the vendor as contemplated in the proviso to section 44(3)(d),

 

the said period of 21 days shall be reckoned from the date the vendor furnishes the Commissioner with the particulars of the bank account or account with a similar institution of the enterprise or from the date the vendor has notified the Commissioner that a refund or other amount be transferred to a bank account or an account with a similar institution other than that of the vendor;

[Paragraph (iiA) inserted by section 44 of Act 61 of 2008 effective on 1 April 2009]

 

(iii)    where the vendor is not a resident of the Republic and-

 

(aa)  has not appointed a representative vendor as contemplated in section 48(1) in the Republic or has not furnished the Commissioner with the particulars of such representative vendor; or

 

(bb)   has not opened a banking account in the Republic as required by paragraph (ii) (bb) of the proviso to section 23 (2) or has not furnished the Commissioner with the particulars of such banking account,

 

the said period of 21 business days shall be reckoned from the date the vendor furnishes the Commissioner with the particulars of such representative vendor or banking account, as the case may be.

[Paragraph (iii) added by section 43 of Act 27 of 1997]

[Subsection (1) amended by section 33 of Act 136 of 1992 and section 4 of Act 61 of 1993, substituted by section 24 of Act 20 of 1994 and amended by section 169 of Act 60 of 2001]

 

(2)     Where the amount of any interest paid to a person in terms of subsection (1) is in excess of the current amount, the Commissioner may recover the amount of the excess under section 40(2)(a) as if it were tax payable by such person.

[Subsection (2) substituted by section 32 of Act 44 of 2014 effective on 20 January 2015. (substitution amended by section 136 of Act 23 of 2015 effective on 20 January 2015 substituted with the previous version as it was prior to the amendment by section 32 of Act 44 of 2014]

 

(3)     The payment by the Commissioner of any interest under the provisions of this section shall be deemed to be a drawback from revenue charged to the National Revenue Fund.

[Subsection (3) added by section 19 of Act 140 of 1993 and amended by section 33 of Act 37 of 1996]

Section 44 (VAT) – Refunds

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44. Refunds

(1)     ……….

[Subsection (1) amended by section 37 of Act 97 of 1993, section 100 of Act 30 of 1998, section 98 of Act 53 of 1999 and section 88 of Act 20 of 2006 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012 except to the extent related to interest in respect of which the wording prior to the amendment applies]

(2)     ……….

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

(3)     The Commissioner shall not make a refund under Chapter 13 of the Tax Administration Act unless-

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

(a)     ………

[Paragraph (a) substituted by section 42 of Act 27 of 1997 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(b)     ……….

[Paragraph (b) amended by section 98 of Act 53 of 1999, substituted by section 88 of Act 20 of 2006 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(c)     the Commissioner is satisfied that any amount of output tax claimed to be refundable to a vendor will, if such amount has been borne by any other person, in turn be refunded by the vendor to such other person;

[Paragraph (c) amended by section 180 of Act 31 of 2013 effective on 1 April 2014]

(d)     the vendor has furnished the Commissioner in writing with particulars of the enterprise’s banking account or account with a similar institution to enable the Commissioner to transfer a refund or other amount due to the vendor to such account: Provided that where the vendor which is-

(i)      a company that is not a resident of the Republic requests that a refund or other amount be transferred to a bank account or an account with a similar institution in the Republic other than that account of the vendor; or

(ii)

(aa)   a subsidiary company, as defined in section 1 of the Companies Act, 2008 (Act No. 71 of 2008), of a holding company, as defined in section 1 of that Act, requests that a refund or other amount be transferred to the bank account or the account with a similar institution in the Republic of that holding company;

(bb)   a subsidiary company, as defined in section 1 of the Companies Act, 2008 (Act No. 71 of 2008), requests that a refund or other amount be transferred to the bank account or the account with a similar institution in the Republic of another subsidiary company of its holding company, as defined in section 1 of that Act; or

(cc)   a holding company, as defined in section 1 of the Companies Act, 2008 (Act No. 71 of 2008), requests that a refund or other amount be transferred to the bank account or the account with a similar institution in the Republic of its subsidiary company, as defined in section 1 of that Act,

[Paragraph (ii) substituted by section 180 of Act 31 of 2013 effective on 1 April 2014]

the vendor must notify the Commissioner in writing and must indemnify the Commissioner against any loss by the vendor or the State as a result of such instruction.

[Paragraph (d) added by section 168 of Act 60 of 2001 and proviso substituted by section 43 of Act 61 of 2008 effective on 1 April 2009]

(4)

(a)     A refund of the amount of the excess contemplated in section 16(5) may only be made by the Commissioner if the return reflecting that amount is submitted within five years after the date on which the return was due to be submitted.

(b)     The amount of an excess contemplated in section 16(5) is regarded as a payment to the National Revenue Fund if the amount is reflected on a return submitted after the period contemplated in paragraph (a).

[Subsection (4) amended by section 37 of Act 97 of 1993 and section 98 of Act 53 of 1999, substituted by section 88 of Act 20 of 2006, deleted by section 271 of Act 28 of 2011 and re-inserted by section 28 of Act 16 of 2016 effective on 26 October 2016]

(5)     ……….

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

(6)     ……….

[Subsection (6) substituted by section 100 of Act 30 of 1998 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(7)     Where the vendor has failed to furnish a return for any tax period as required by this Act, the Commissioner may withhold payment of any amount refundable to the vendor under section 190 of the Tax Administration Act until the vendor has furnished such return as so required.

[Subsection (7) substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(8)     ……….

[Subsection (8) substituted by section 42 of Act 27 of 1997 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(9)     The Commissioner may make or authorise a refund of any amount of tax which has become refundable to any person under the provisions of any regulation referred to in paragraph (d) of the definition of ‘exported’ in section 1.

[Subsection (9) substituted by section 31 of Act 44 of 2014 effective on 20 January 2015]

(10)   The amount determined under section 191(3) of the Tax Administration Act must be accounted for as provided in section 16(5), but any refundable amount (irrespective of the quantum thereof) is refundable in full to a vendor in respect of its final tax period on the cancellation of its registration as a vendor.

[Subsection (10) added by section 271 of Act 28 of 2011 effective on 1 October 2012]

(11)

(a) A refund of the amount erroneously paid, as contemplated in section 190(1)(b) of the Tax Administration Act, may only be made by the Commissioner where the claim for the refund of such erroneous payment is received by the Commissioner within five years after the date on which the erroneous payment was made;

(b) A claim for a refund under paragraph (a) shall be deemed not to have been received where the vendor has not furnished the Commissioner in writing with the particulars of the enterprise’s banking account or an account with a similar institution, as contemplated in subsection (3)(d), within 90 days from the submission of the claim.

[Subsection (11) added by section 12 of Act 22 of 2018]

Section 41B (VAT) – VAT class ruling and VAT ruling

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41B.    VAT class ruling and VAT ruling

 

(1)     The Commissioner may issue a VAT class ruling or a VAT ruling and in applying the provisions of Chapter 7 of the Tax Administration Act, a VAT class ruling or a VAT ruling must be dealt with as if it were a binding class ruling or a binding private ruling, respectively: Provided that-

(a)     the provisions of sections 79(4)(f), (k), (6) and 81(1)(b) of the Tax Administration Act shall not apply to any VAT class ruling or VAT ruling;

(b)     an application for a VAT class ruling or a VAT ruling in terms of this section shall not be accepted by the Commissioner if the application-

(i)      is for an advance tax ruling that qualifies for acceptance in terms of Chapter 7 of the Tax Administration Act; and

(ii)      falls within a category of rulings prescribed by the Minister by regulation for which applications for rulings in terms of this section may not be accepted.

[Subsection (1) amended by section 42(a) of Act 61 of 2008 and by section 40 of Act 18 of 2009, substituted by section 271 read with paragraph 131 of Schedule 1 of Act 28 of 2011 and amended by section 20 of Act 33 of 2019]

 

(2)     For the purposes of this section-

“VAT class ruling” means a written statement issued by the Commissioner to a class of vendors or persons regarding the interpretation or application of this Act;

“VAT ruling” means a written statement issued by the Commissioner to a person regarding the interpretation or application of this Act.

 

42. ……….

[Section 42 repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

43. ……….

[Section 43 amended by section 99 of Act 30 of 1998, section 97 of Act 53 of 1999 and section 81 of Act 30 of 2000 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

Section 41 (VAT) – Liability in respect of certain past supplies or importations

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41. Liability for tax in respect of certain past supplies or importations

Notwithstanding anything to the contrary in this Act (other than the provisions of section 41B)-

(a)     no amount of tax otherwise properly chargeable and payable by any person or not deductible by him under this Act, shall be recoverable by the Commissioner in respect of any past supply of goods or services or any past importation of goods if, in terms of a general written ruling by the Commissioner or a general oral ruling given by him prior to 9 July 1993 which had not been withdrawn by him at the time at which the said person became contractually obliged to supply or receive such goods or services, as the case may be, no tax was payable or a deduction was allowed in respect of such supply or importation;

[Paragraph (a) substituted by section 36 of Act 97 of 1993 and section 98 of Act 30 of 1998]

(b)     no further amount of tax shall be recoverable by the Commissioner in respect of or in relation to any past supply of goods or services or any past importation of goods if, in terms of a general written ruling by the Commissioner or a general oral ruling given by him prior to 9 July 1993 which had not been withdrawn by him at the time of such supply or importation, the tax payable or deductible in respect of such supply or importation had been calculated and paid or had been deducted in accordance with such ruling, as the case may be;

[Paragraph (b) substituted by section 36 of Act 97 of 1993 and section 98 of Act 30 of 1998]

(c)     where any written decision or, prior to 9 July 1993 an oral decision has been given by the Commissioner-

(i)      to the effect that any person is required or not required to be registered as a vendor in terms of the provisions of this Act; or

(ii)     as to the taxable or non-taxable nature of any supply of goods or services by any person or of the importation of goods by any person (including any decision as to the applicability of any exemption or rate of zero per cent) or as to the deductibility or non-deductibility in terms of section 16(3) of tax in respect of the supply to any person of goods or services or the importation by any person of goods,

and such decision is subsequently withdrawn, such withdrawal shall, as respects any contractual obligation incurred in accordance with the decision given by the Commissioner by the person concerned before such withdrawal to supply or receive the goods or services concerned, not affect the liability or non-liability of that person for the payment of tax in accordance with such decision or his entitlement or otherwise to a deduction of tax, as determined in accordance with such decision, as the case may be, provided such decision was accepted by the said person and all the material facts were known to the Commissioner when the decision was given:

[Paragraph (c) amended by section 36 of Act 97 of 1993 and substituted by section 98 of Act 30 of 1998]

: Provided further that paragraphs (a), (b) and (c) shall not apply to-

(i)      a written decision or a general written ruling issued by the Commissioner prior to 1 January 2007 in respect of supplies which are or will be made or goods imported on or after 1 January 2007, except to the extent that the Commissioner prescribes in writing that the written decision or the general written ruling has binding effect on or after that date; or

(ii)     a written decision or a general written ruling issued by the Commissioner on or after 1 January 2007.

[Further proviso added by section 16 of Act 9 of 2007 with effect from 1 January 2007]

[Section 41 amended by section 39(1)(a) of Act 21 of 2006, by section 16(1) of Act 9 of 2007 and by section 11 of Act 22 of 2018]

41A.    ……….

[Section 41A inserted by section 40 of Act 21 of 2006 with effect from 1 January 2007 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

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

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40D.  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 2017.

(2)     Where the Commissioner issued any assessment relating to tax periods ending before 1 April 2017 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 2017 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 40D inserted by section 85 of Act 17 of 2017 effective on 1 April 2017]

Section 40C (VAT) – Liability of bargaining councils or political parties for tax and limitations of refunds

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40C.  Liability of bargaining councils or political parties for tax and limitation of refunds

 

(1)     This section applies in respect of the supply of goods or services contemplated in section 12(l) or (m) before 1 January 2013, by any bargaining council or political party, as the case may be.

 

(2)     Where the Commissioner before 1 January 2013, issued an assessment to levy tax at the rate referred to in section 7(1) in respect of any supply of goods or services contemplated in subsection (1), the Commis­sioner must, on written application, reduce that assessment to the extent that the amount of tax, additional tax, penalty or interest in respect of that assessment was not yet paid on that date: Provided that the reduced assessment will not result in a refund to that bargaining council or political party.

 

(3)     The Commissioner may not after 1 January 2013 make any assessment in respect of any supply of goods or services contemplated in subsection (1).

 

(4)     If a bargaining council or political party charged tax at the rate referred to in section 7(1) in respect of any 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, received or accrued from that bargaining council or political party to the Commissioner.

[Section 40C inserted by section 151 of Act 22 of 2012 effective on 1 January 2013]

Section 39 (VAT) – Penalty for failure to pay tax when due

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39. Penalty for failure to pay tax when due

[Heading of section 39 substituted by section 271 of Act 28 of 2011 effective on 1 October 2012 except to the extent related to interest in respect of which the wording prior to the amendment applies]

 

(1)     If any person who is liable for the payment of tax and is required to make such payment in accordance with the provisions of section 14, 28(1) or 29, fails to pay any amount of such tax within the period for the payment of such tax specified in the said provisions, the Commissioner must, in accordance with Chapter 15 of the Tax Administration Act, impose a penalty equal to 10 per cent of the said amount of tax.

[Subsection (1) amended by section 30 of Act 136 of 1992 and section 3 of Act 61 of 1993 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012 except to the extent related to interest in respect of which the wording prior to the amendment applies]

 

 (2)    ………..

[Subsection (2) amended by section 3 of Act 61 of 1993 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012 except to the extent related to interest in respect of which the wording prior to the amendment applies]

 

(3)     If any person who is liable for the payment of tax in accordance with the provisions of section 8(2C) or 8(2D) fails to pay any amount of such tax within the period allowed for the payment of such tax in terms of that section, the person shall, in addition to such amount of tax, pay where payment of the said amount of tax is made on or after the first day of the month following the month during which the period allowed for payment of the tax ended, interest on the said amount of tax, calculated at the prescribed rate (but subject to the provisions of section 45A) for each month or part of a month in the period reckoned from the said first day.

[Subsection (3) amended by section 3 of Act 61 of 1993, deleted by section 105 of Act 32 of 2004 and inserted by section 114 of Act 60 of 2008 effective on 1 March 2009]

 

(4)     Where any importer of goods which are required to be entered under the Customs and Excise Act, fails to pay any amount of tax payable in respect of the importation of the goods on the date on which the goods are entered under the said Act for home consumption in the Republic or the date on which customs duty is payable in terms of the said Act in respect of the importation or, if such duty is not payable, the date on which it would be so payable if it had been payable, whichever date is later, the Commissioner must, in accordance with Chapter 15 of the Tax Administration Act, impose on that importer a penalty equal to 10 per cent of the said amount of tax.

[Subsection (4) substituted by section 37 of Act 136 of 1991, amended by section 3 of Act 61 of 1993, deleted by section 40 of Act 27 of 1997, inserted by section 184 of Act 45 of 2003 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012 except to the extent related to interest in respect of which the wording prior to the amendment applies]

 

(5)     Where any person who is liable for the payment of tax fails to pay any amount of such tax on the date on which in terms of the Customs and Excise Act, liability arises for the payment of the excise duty or environmental levy referred to in section 7(3)(a), the Commissioner must, in accordance with Chapter 15 of the Tax Administration Act, impose on that person a penalty equal to 10 per cent of the said amount of tax.

[Subsection (5) substituted by section 37 of Act 136 of 1991, amended by section 3 of Act 61 of 1993, deleted by section 166 of Act 60 of 2001, inserted by section 50 of Act 16 of 2004 and substituted by section 22 of Act 9 of 2005 and by section 271 of Act 28 of 2011 effective on 1 October 2012 except to the extent related to interest in respect of which the wording prior to the amendment applies.]

 

(6)     ……….

[Subsection (6) amended by section 3 of Act 61 of 1993 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

 

(7)     ……….

[Subsection (7) substituted by section 23 of Act 20 of 1994 and section 40 of Act 27 of 9, amended by section 50 of Act 16 of 2004, section 105 of Act 32 of 2004 and section 114 of Act 60 of 2008, substituted by section 39 of Act 18 of 2009 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012 except to the extent related to interest in respect of which the wording prior to the amendment applies]

 

(8)     Notwithstanding anything to the contrary in this section, the Commissioner may prescribe, by notice in the Gazette, that any interest on any outstanding amount payable in terms of this Act, is calculated on the daily balance owing and compounded monthly from such date and for such period as the Commissioner may prescribe.

[Subsection (8) deleted by section 184 of Act 45 of 2003 and added by section 39 of Act 18 of 2009]

[Subsection (8) to be deleted by section 271 of Act 28 of 2011 with effect from a date determined by the President by proclamation in the Gazette]

 

40. ……….

[Section 40 amended by section 31 of Act 136 of 1992 and deleted by section 271 of Act 28 of 2011 effective on 1 October 2012]

 

40A.  ……….

[Section 40A inserted by section 23 of Act 9 of 2005 and repealed by section 100 of Act 43 of 2014 effective on 20 January 2015]

 

40B.    ……….

[Section 40B inserted by section 51 of Act 9 of 2006 and repealed by section 101 of Act 43 of 2014 effective on 20 January 2015]

Section 38 (VAT) – Manner in which tax shall be paid

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38. Manner in which tax shall be paid

 

(1)     Subject to the provisions of section 7(3)(d) and section 13(5) and (6), the tax payable under this Act must be paid in full within the time allowed by section 14 or section 28 or section 29, whichever is applicable.

[Subsection (1) substituted by section 165 of Act 60 of 2001and section 39 of Act 32 of 2005]

 

(2)     Where the Commissioner is satisfied that due to circumstances beyond the control of the person liable for the payment of the tax the amount of tax due cannot be accurately calculated within the time allowed by section 14 or section 28 or section 29, whichever is applicable, the Commissioner may in his or her discretion and subject to such conditions as he or she may impose, agree to accept a payment of a deposit by such person of an amount equal to the estimated liability of such person for such tax.

[Subsection (2) substituted by section 39 of Act 32 of 2005]

 

(3)     Such payment shall be deemed to be a provisional payment in respect of the liability of the said person for such tax, as finally determined, and when such liability is so determined any amount paid in excess shall be refundable to such person and any amount short-paid shall be recoverable from him.