Category: PART VIII – SPECIAL PROVISIONS (VAT)

Section 54A (VAT) – Advance Tax Rulings

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54A.    Advance Tax Rulings

 

(1)     The provisions relating to advance tax rulings contained in Part IA of Chapter III of the Income Tax Act, 1962, apply mutatis mutandis for purposes of this Act.

 

(2)     Any procedures and guidelines issued by the Commissioner in terms of section 76S of the Income Tax Act, 1962, for implementation and operation of the advance tax ruling system apply mutatis mutandis for purposes of this Act.

[Section 54A inserted by section 42 of Act 34 of 2004, effective on 1 October 2006]

Section 54 (VAT) – Agents and auctioneers

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54. Agents and auctioneers

 

(1)     For the purposes of this Act, where an agent makes a supply of goods or services for and on behalf of any other person who is the principal of that agent, that supply shall be deemed to be made by that principal and not by that agent: Provided that, where that supply is a taxable supply and that agent is a vendor, the agent may, notwithstanding anything to the contrary in this Act, issue a tax invoice or a credit note or a debit note in relation to such supply as if the agent had made a taxable supply, and to the extent that that tax invoice or credit note or debit note relates to that supply, the principal shall not also issue a tax invoice or a credit note or a debit note, as the case may be:

 

Provided further that where an agent issues a tax invoice on behalf of a principal, such tax invoice must be issued within 21 days of the date of that supply by that agent.

[Further proviso added by section 102 of Act 43 of 2014 effective on 1 April 2015]

 

(2)     For the purposes of this Act, where any vendor makes a taxable supply of goods or services to an agent who is acting on behalf of another person who is the principal for the purposes of that supply, that supply shall be deemed to be made to that principal and not to such agent: Provided that such agent may nevertheless request that he be provided with a tax invoice and the vendor may issue a tax invoice or a credit note or debit note as if the supply were made to such agent.

 

(2A)

 

(a)     For the purposes of this Act, where any goods are imported into the Republic by an agent who is acting on behalf of another person who is the principal for the purposes of that importation, that importation shall be deemed to be made by that principal and not by such agent: Provided that a bill of entry or other document prescribed in terms of the Customs and Excise Act in relation to that importation may nevertheless be held by such agent.

 

(b)     Notwithstanding the provisions of paragraph (a), where any goods are imported into the Republic by an agent who is acting on behalf of another person who is the principal for the purposes of that importation, and-

 

(i)      the agent is a registered vendor; and

 

(ii)     the principal is not a resident of the Republic and is not a registered vendor; and

 

(iii)    the goods are imported by the principal for the purposes of a supply made or to be made by him to a person in the Republic; and

 

(iv)    the agent obtains and retains documentary proof, as is acceptable to the Commissioner, that-

 

(aa)   he paid the tax on importation on behalf of that principal; and

 

(bb)   such agent and that principal agree in writing that the said tax has not and will not be reimbursed to such agent by that principal,

 

that importation shall for the purposes of this Act be deemed to be made by such agent and not by that principal.

[Paragraph (b) added by section 46 of Act 27 of 1997, the existing subsection (2A) becoming (2A)(a)]

[Subsection (2A) inserted by section 34 of Act 136 of 1992]

 

(2B)  For the purposes of this Act, where electronic services are supplied by an intermediary, who is acting on behalf of another person who is the principal for the purposes of that supply, and—

 

(i)      the intermediary is a vendor;

 

(ii)     the principal is not a resident of the Republic and is not a registered vendor; and

 

(iii)     the electronic services are supplied or to be supplied by the principal to a person in the Republic,

 

that supply shall be deemed to be made by such intermediary and not by that principal.

[Subsection (2B) inserted by section 12(1) of Act 21 of 2018 effective on 1 April, 2019 and applicable in respect of supplies made on or after that date]

 

(2C)  For the purposes of this Act, where gold is supplied as contemplated in section 11(1)(f) or where gold is exported from the Republic in the circumstances contemplated in paragraph (a) or (d) of the definition of “exported” in section 1(1) and in accordance with section 12 of the of the Precious Metals Act, 2005 (Act 37 of 2005), by an agent who is acting on behalf of another person who is the principal for the purposes of that supply and-

 

(a)     the agent is a registered vendor; and

 

(b)     the principal is a resident of the Republic and a registered vendor,

 

the agent must obtain and retain documentary proof as is acceptable to the Commissioner: Provided that the agent will-

 

(aa)   not be required to provide the principal with copies of the documentary evidence as prescribed; and

 

(bb)   be liable to account for output tax in the event that the agent is not in possession of the requisite documents, other than zero-rated tax invoices in circumstances where the principal supplied its gold directly to the purchaser, to substantiate the application of the zero rate in respect of supplies made by the agent on behalf of a principal.

[Subsection (2C) inserted by section 52(1) of Act 17 of 2023 effective on 1 April, 2024]

 

(3)     Where-

 

(a)     a tax invoice or a credit note or debit note in relation to a supply has been issued-

 

(i)    by an agent as contemplated in subsection (1); or

 

(ii)   to an agent as contemplated in subsection (2); or

 

(b)     a bill of entry or other document prescribed in terms of the Customs and Excise Act in relation to the importation of goods is held by an agent as contemplated in subsection (2A),

 

the agent shall maintain sufficient records to enable the name, address and VAT registration number of the principal to be ascertained, and in respect of all-

 

(i)      supplies made on or after 1 January 2000 by or to the agent on behalf of the principal, the agent shall notify the principal in writing by means of a statement within 21 days of the end of the calendar month during which the supply was made or received of the particulars contemplated in paragraphs (e), (f) and (g) of section 20(4) in relation to such supplies; or

 

(ii)     goods imported by the agent on behalf of the principal, the agent shall notify the principal in writing by means of a statement within 21 days of the end of the calendar month during which the goods were imported of the full and proper description of the goods, the quantity or volume of the goods, the value of the goods imported and the amount of tax paid on importation of the goods, together with the receipt number of the payment of such tax.

[Words following paragraph (b) substituted by section 102 of Act 43 of 2014 effective on 1 April 2015]

[Subsection (3) substituted by section 34 of Act 136 of 1992 and amended by section 100 of Act 53 of 1999 and section 51 of Act 16 of 2004]

 

(4)     For the purposes of subsection (5), the expression “auctioneer” means a vendor carrying on an enterprise which comprises or includes the supply by him by auction, of goods as an auctioneer or agent for or on behalf of another person (hereinafter in this section referred to as a principal) and includes an agent, fresh produce agent and livestock agent as defined in section 1 of the Agricultural Produce Agents Act, 1992 (Act No. 12 of 1992).

[Subsection (4) substituted by section 40 of Act 136 of 1991 and section 100 of Act 53 of 1999]

 

(5)     Notwithstanding anything in the preceding provisions of this section, where the principal and the auctioneer agree to have a supply by auction of any goods, other than a taxable supply, treated as if that supply were made by the auctioneer and not by the principal, the supply shall be charged with tax as if it were made by the auctioneer in the course or furtherance of the auctioneer’s enterprise and the auctioneer may-

 

(a)     recover the amount of tax charged on that supply from that principal as a debt together with the costs of recovery in any court of competent jurisdiction; or

 

(b)     retain or deduct such amount and costs out of any money in the auctioneer’s hands belonging or payable to the principal:

 

Provided that the auctioneer or agent shall maintain the records contemplated in section 20(8) as if the principal made a supply of second-hand goods to him, not being a taxable supply.

[Subsection (5) amended by section 100 of Act 53 of 1999]

 

(6)     Notwithstanding anything in subsection (2), where any vendor makes a taxable supply (other than a supply that is charged with tax at the rate of zero per cent under section 11) of goods or services to an agent who is a vendor and is acting for or on behalf of another person who is the principal for the purposes of that supply, and-

 

(a)     the principal is not a resident of the Republic and is not a vendor; and

 

(b)

 

(i)      the supply is directly in connection with either the exportation, or the arranging of the exportation, of goods from the Republic to any country or place outside the Republic, or the importation, or the arranging of the importation, of goods to the Republic from any country or place outside the Republic, including, in either case, the transportation of those goods within the Republic as part of such exportation or importation, as the case may be; or

[Subparagraph (i) substituted by section 25 of Act 20 of 1994]

 

(ii)     the supply is of services which comprise the handling, pilotage, salvage or towage of any foreign-going ship or foreign-going aircraft while present in the Republic or is of services provided in connection with the operation or management of any foreign-going ship or foreign-going aircraft,

[Subparagraph (ii) substituted by section 25 of Act 20 of 1994]

 

this Act shall, where such agent and such principal agree, apply as if the supply were made to that agent and not to the principal.

Section 53 (VAT) – Death or insolvency of vendor

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53. Death or insolvency of vendor

(1)


(a)     Where, after the death of any vendor or the sequestration of his estate, any enterprise previously carried on by the vendor continues to be carried on by or on behalf of the executor or trustee of his estate or anything is done in connection with the termination of the enterprise, the estate of the vendor, as represented by the executor or trustee, as the case may be, shall for the purposes of this Act be deemed to be a vendor in respect of the enterprise.

(b)     Where the provisions of paragraph (a) are applicable, the deceased vendor and his estate or the vendor whose estate is sequestrated and his estate, as the case may be, shall, as respects the enterprise in question, be deemed for the purposes of this Act to be one and the same person.

(2)     Where a mortgagee is in possession of any land or other property previously mortgaged by the mortgagor, being a vendor, and the mortgagee carries on any enterprise of the mortgagor in relation to such land or other property, the mortgagee shall, from the date on which the mortgagee took possession of that land or other property, until such time as the mortgagee ceases to be in possession of that land or other property, be deemed, to the extent that the mortgagee carries on such enterprise, to be a vendor.

Section 52 (VAT) – Pooling arrangements

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52. Pooling arrangements

(1)     Any pool managed by any body for the sale of agricultural, pastoral or other farming products, being a pool contemplated in section 17 of the Marketing of Agricultural Products Act, 1996 (Act No. 47 of 1996) may on written application by such body, for the purposes of this Act be deemed to be an enterprise or part of an enterprise carried on by that body separately from the members of such body: Provided that such body may-

(i)      elect in writing that the pool be treated as a separate enterprise for the purposes of this Act and may apply for such pool to be registered separately in terms of section 50; and

(ii)   notwithstanding the provisions of section 54(1) and (2), if it makes an election in writing, be treated for the purposes of this Act as a principal and not as an agent of its members.

[Subsection (1) amended by section 45 of Act 27 of 1997 and substituted by section 171 of Act 60 of 2001]

(2)     Notwithstanding the provisions of section 54, any rental pool scheme operated and managed by any person for the benefit of some or all of-

(a)     the owners of time-sharing interests in a property time-sharing scheme as defined in section 1 of the Property Timesharing Control Act, 1983 (Act 75 of 1983);

(b)     the owners of sectional title interests in a sectional title scheme as defined in section 1 of the Sectional Title Act, 1986 (Act No. 95 of 1986); or

(c)     the shareholders in a Shareblock Company as defined in section 1 of the Shareblocks Control Act, 1980 (Act No 59 of 1980), is regarded for the purposes of this Act as a separate enterprise carried on by such person separately from the owners and shall be registered separately under section 50: Provided that-

(i)    the owners or shareholders must elect in writing that the rental pool be treated separately; and

(ii)     such a rental pool scheme is, notwithstanding the provisions of section 54(1) and (2), treated for the purposes of this Act as a principal and not as an agent of the owners or shareholders.

[Subsection (2) substituted by section 171 of Act 60 of 2001]

(3)

(a)     Any pool managed by any person for the benefit of the members of the pool, not being a pool contemplated in subsections (1) and (2), may on written application by such person or pool, for the purposes of this Act, be deemed to be an enterprise carried on by that person separately from the members of such pool: Provided that—

(i)      the pooling arrangement is established as a manner of compliance with the provisions of the laws of the Republic or regulations or rules promulgated by a professional body;

(ii)     such person or pool must elect in writing that the pool be treated as a separate enterprise for the purposes of this Act and must apply for such pool to be registered separately in terms of section 50; and

(iii)    notwithstanding the provisions of section 54(1) and (2), the pool shall be treated for the purposes of this Act as a principal and not as an agent of the members of such pool.

(b)     Failure to comply with the provisions of this Act will result in the pooling arrangement and members of such pooling arrangement being held jointly and severally liable for any VAT loss suffered by the fiscus.

[Section 52 substituted by section 39 of Act 136 of 1991. Subsection (3) added by section 33(1) of Act 20 of 2022 effective on 1 January, 2023]

[Section 52 substituted by section 39 of Act 136 of 1991]

Section 51 (VAT) – Bodies of persons, corporate or unincorporate (other than companies)

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51. Bodies of persons, corporate or unincorporate (other than companies)

(1)     Subject to the provisions of section 46, where any body of persons, whether corporate or unincorporate (other than a company), carries on or is to carry on any enterprise-

(a)     such body shall be deemed to carry on such enterprise as a person separate from the members of such body;

(b)     registration of that body as a vendor shall be effected separately from any registration of any of its members in respect of any other enterprise;

(c)     liability for tax in respect of supplies by the body shall be determined and calculated in respect of the enterprise carried on by it as an enterprise carried on independently of any enterprise carried on by any of its members, and any refund relating to the body’s enterprise which is payable in terms of section 44 shall be made to that body; and

(d)     the duties and obligations imposed by this Act on any vendor or other person shall, as respects the enterprise carried on by that body, be performed by it separately from the duties and obligations imposed on any of its members.

(2)     Where any such body is a partnership or other unincorporated body and is dissolved in consequence of the retirement or withdrawal of one or more (but not all) of its members or the admission of a new member and a new partnership or unincorporated body comes into being consisting of the remaining members of the dissolved partnership or body, as the case may be, or such remaining members and one or more new members and the new partnership or body continues to carry on the enterprise of the dissolved partnership or body as a going concern, the dissolved partnership or body and the new partnership or body, as the case may be, shall (unless the Commissioner, having regard to the circumstances of the case, otherwise directs) for the purposes of this Act be deemed to be one and the same partnership or body, as the case may be.

(3) Subject to the provisions of section 46, every member of a partnership or joint venture shall be liable jointly and severally with other members of the partnership or joint venture for performing the duties of the partnership or joint venture in terms of this Act and paying the tax imposed by this Act on the partnership or joint venture in respect of supplies made by the partnership or joint venture while such member was a member of the partnership or joint venture: Provided that this subsection shall not apply to any such member of a partnership who, in relation to that partnership, is a partner en commandite or a special partner, as defined in the Special Partnerships’ Limited Liability Act, 1861 (Act 24 of 1861), of the Cape of Good Hope or in Law No. 1 of 1865 of Natal, who has not held himself out as an ordinary or general partner of the partnership concerned.

[Subsection (3) substituted by section 14 of Act 22 of 2018]

Section 50A (VAT) – Separate persons carrying on same enterprise under certain circumstances deemed to be single person

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50A.  Separate persons carrying on same enterprise under certain circumstances deemed to be single person

(1)     Notwithstanding the provisions of section 23, if the Commissioner makes a decision  under this section, the persons named in the decision shall be deemed to be a single person carrying on the activities of an enterprise described in the decision and that person shall be liable to be registered in terms of section 23 with effect from the date of the decision or, if the decision so provides, from such date as may be specified therein.

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

(2)     The Commissioner shall not make a decision under this section naming any person unless he or she is satisfied-

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

(a)     that such person is making or has made taxable supplies; and


(b)     that the activities in the course of which he makes or made those taxable supplies form only part of certain activities which should properly be regarded as those of the enterprise described in the decision, the other activities of that enterprise being carried on at that time or previously by one or more other persons; and

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


(c)     that, if all the taxable supplies of that enterprise were taken into account, a person carrying on that enterprise should at that time be liable to be registered in terms of subsection (1); and


(d)     that the main reason or one of the main reasons for the person concerned carrying on the activities first referred to in subparagraph (b) in the way he does is the avoidance of a liability to be so registered (whether that liability would be his, another person’s or that of two or more persons jointly).

(3)     A decision made under this section shall be served on each of the persons named in it.

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

(4)     Where, after a decision has been given under this section specifying a description of the enterprise, it appears to the Commissioner that a person who was not named in that decision is making taxable supplies in the course or furtherance of activities which should properly be regarded as part of the activities of that enterprise, the Commissioner may make and serve on him a supplementary decision referring to the earlier decision and the description of the enterprise specified in it and adding that person’s name to those of the persons named in the earlier direction with effect from-

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

(a)     the date on which he began to make those taxable supplies; or


(b)     if it was later, the date with effect from which the single person referred to in the earlier direction became liable to be registered in terms of this section.

(5)     If, immediately before a decision (including a supplementary decision) is made under this section, any person named in the decision is registered in respect of the taxable supplies made by him or her as contemplated in subsection (2) or (4), he or she shall cease to be liable to be so registered with effect from-

(a)     the date with effect from which the single person concerned became liable to be registered; or


(b)     the date of the decision,


whichever date is the later.

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

(6)     In relation to an enterprise specified in a decision (including a supplementary decision) under this section, the persons named in such decision, who together are deemed to be the liable person, are in subsections (7) and (8) referred to as the members.

[Subsection (6) substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(7)     For the purposes of this Act, where a decision is made under this section-

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

(a)     the person carrying on the enterprise specified in the decision shall be registrable in such name as the members may jointly nominate upon compliance with the provisions of section 23(2);

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


(b)     any supply of goods or services by or to one of the members in the course of the activities of such single person shall be deemed to be a supply by or to such single person;


(c)     each of the members shall be jointly and severally liable for any tax due by such single person;


(d)     notwithstanding the provisions of paragraph (c), any failure by such single person to comply with any requirement imposed upon him by or under this Act shall be deemed to be a failure by each of the members severally; and


(e)     subject to paragraphs (a) to (d) of this subsection, the members shall be deemed to be a body of persons carrying on the enterprise of such single person and any question as to the scope of the activities of that enterprise at any time shall be determined accordingly.

(8)     If the Commissioner is of the opinion that any person who is one of the members should no longer be regarded as such for the purposes of subsection (7) (c) and (d) and the Commissioner gives notice to that effect, that person shall no longer be liable in terms of that subsection for anything done after the date specified in that notice and shall be deemed to have ceased to be a member of the body of persons referred to in subsection (7) (e).

[Section 50A inserted by section 44 of Act 27 of 1997]

Section 50 (VAT) – Separate enterprises, branches and divisions

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50. Separate enterprises, branches and divisions

(1)     Where separate enterprises are carried on by any vendor or an enterprise is carried on by any vendor in branches or divisions, the vendor may apply in writing to the Commissioner for any such separate enterprise, branch or division to be registered separately for the purposes of this Act: Provided that the activities carried on by a vendor, being an implementing agency, in the course of implementing, operating, administering or managing a foreign donor funded project shall, for the purposes of subsection (2A), be regarded as an enterprise carried on separately from that vendor’s other enterprise activities.

[Subsection (1) amended by section 72(1)(a) of Act 34 of 2019 effective on 1 April, 2020]

(2)     Subject to the provisions of subsection (2A), the Commissioner shall, upon application made under subsection (1), register any separate enterprise, branch or division as a separate vendor if each such separate enterprise, branch or division maintains an independent system of accounting and can be separately identified by reference to the nature of the activities carried on or the location of the separate enterprise, branch or division, and where any such separate enterprise, branch or division is so separately registered, the activities carried on by that separate enterprise, branch or division shall be deemed to be carried on by a person separate from the vendor referred to in subsection (1).

[Subsection (2) substituted by section 72(1)(b) of Act 34 of 2019 effective on 1 April, 2020]

(2A    The implementing agency shall be required to make application to the Commissioner to register the activities referred to in the proviso to subsection (1) as a separate branch of the vendor: Provided that the activities in relation to each foreign donor funded project shall be registered as a separate branch of the vendor and such vendor shall maintain an independent system of accounting for each foreign donor funded project.

[Subsection (2A) inserted by section 72(1)(c) of Act 34 of 2019 effective on 1 April, 2020]

(3)     The Commissioner may, with effect from a date determined by him, cancel any registration in terms of subsection (2) of any separate enterprise, branch or division, if-

(a)     the vendor referred to in subsection (1) has applied to the Commissioner in writing for such registration to be cancelled; or

(b)     it appears to the Commissioner that the duties or obligations of such separate enterprise, branch or division have not been satisfactorily performed or carried out,

and any activity carried on by that separate enterprise, branch or division shall as from the said date be deemed to be carried on by the said vendor.

(4)     The Commissioner shall cancel the separate registration of any separate enterprise, branch or division on the cancellation of the registration of the vendor referred to in subsection (1).

(5)     Where any separate enterprise, branch or division separately registered under this section fails to do anything required to be done under this Act, the liability for the doing of that thing shall revert to the vendor referred to in subsection (1).

(6)     Notwithstanding the preceding provisions of this section, any decision or determination of the Commissioner made under section 15 or 27 in respect of the vendor referred to in subsection (1) of this section shall, for the purposes of this Act, apply equally to each separate enterprise, branch or division of the vendor which is separately registered under this section: Provided that where a decision or determination is made by the Commissioner under subsection (2) of section 27 which applies in respect of any such separate enterprise, branch or division, this subsection shall not be construed as preventing the Commissioner from making a separate decision or determination under subsection (4) of the said section in the circumstances contemplated in that subsection in respect of any other separate enterprise, branch or division of the said vendor.

[Subsection (6) substituted by section 38 of Act 136 of 1991 and section 271 of Act 28 of 2011 effective on 1 October 2012]

(7) Notwithstanding the provisions of this section, any amount that is refundable under section 190 of the Tax Administration Act (including interest thereon) to the vendor referred to in subsection (1) or any separate enterprise, branch or division, which is registered separately in terms of subsection (2), may be set off against the outstanding tax debt of the vendor referred to in subsection (1) or any separate enterprise, branch or division, which is registered separately in terms of subsection (2), as the case may be.

[Subsection (7) added by section 13 of Act 22 of 2018]