Category: PART X – MISCELLANEOUS (VAT)

Section 82 (VAT) – Amendment of section 24 of Act 77 of 1968

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82. Amendment of section 24 of Act 77 of 1968, as amended by section 21 of Act 103 of 1969, section 11 of Act 88 of 1974, section 4 of Act 70 of 1975, section 12 of Act 114 of 1977, section 6 of Act 92 of 1983, section 26 of Act 87 of 1988 and section 9 of Act 69 of 1989

(1)     Section 24 of the Stamp Duties Act, 1968, is hereby amended­-

    

(a)     by the deletion of subsection (1);

    

(b)     by the substitution for paragraph (a) of subsection (2) of the following paragraph:

“(a)  receives or takes credit for any premium or consideration for any policy or certificate of insurance or any endorsement thereto chargeable with duty under Item 18 of Schedule 1 [or for any renewal of any policy or certificate of Insurance chargeable with duty under paragraph (4) of the said Item] and does not within one month after receiving or taking credit for such premium or consideration make out and execute a policy, receipt or instrument; or”; and

(c)     by the deletion of subsections (2A), (3), (4), (5), (6), (7), (8) and (8A).

(2)     Subsection (1) shall come into operation on the commencement date: Provided that any stamp duty or other amount which but for such amendments would have been capable of being levied or recovered under subsection (4) of the said section 24 in respect of policies, certificates of insurance and endorsements thereon executed before that date and renewal thereof falling due before that date shall be levied, paid and recovered as if the said amendments had not been affected.

Section 81 (VAT) – Amendment of section 23 of Act 77 of 1968

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81. Amendment of section 23 of Act 77 of 1968, as amended by section 20 of Act 103 of 1969, section 13 of Act 92 of 1971, section 11 of Act 89 of 1972, section 10 of Act 66 of 1973, section 10 of Act 88 of 1974, section 20 of Act 106 of 1980, section 6 of Act 87 of 1982, section 5 of Act 92 of 1983, section 25 of Act 87 of 1988 and section 8 of Act 69 of 1989

 

Section 23 of the Stamp Duties Act, 1968, is hereby amended by the addition to paragraph (b) of subsection (4) of the following subparagraph:

(viii)  where exemption from duty is claimed under paragraph (v) of the Exemptions to Item 15(3) of Schedule 1, there is annexed to such instrument a declaration signed by the transferor containing the following particulars:

(aa)   The name and address of the transferor and the registration number allocated to him as a vendor under the Value-Added Tax Act, 1991;

(bb)   the name and address of the transferee;

(cc)   the date of the sale or disposal of the share in respect of which the registration of transfer is to be effected, and the amount of the consideration given by the transferee for the share under the sale or disposal, excluding value-added tax within the meaning of the said Act; and

(dd)   the amount of the said value-added tax payable in respect of the sale or disposal and the tax period under the said Act in respect of which such tax has been or will be payable.

Section 80 (VAT) – Amendment of section 12 of Act 40 of 1949

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80. Amendment of section 12 of Act 40 of 1949, as substituted by section 8 of Act 103 of 1969 and amended by section 2 of Act 72 of 1970, section 2 of Act 92 of 1971, section 1 of Act 70 of 1975 and section 4 of Act 86 of 1987

Section 12 of the Transfer Duty Act, 1949, is hereby amended by the substitution for subsection (2) of the following subsection:

“(2)   The provisions of subsection (1) shall not apply with reference to an acquisition of property in respect of which there is lodged with the registration officer a certificate issued in terms of section 11(3) (a) or 9(15)(c).”.

Section 79 (VAT) – Amendment of section 9 of Act 40 of 1949

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79. Amendment of section 9 of Act 40 of 1949, as amended by section 3 of Act 31 of 1953, section 12 of Act 80 of 1959, section 3 of Act 70 of 1963, section 3 of Act 77 of 1964, section 1 or Act 81 of 1965, section 7 of Act 103 of 1969, section 2 of Act 89 of 1972, section 3 of Act 66 of 1973, section 5 of Act 88 of 1974, section 77 of Act 54 of 1976, section 2 of Act 95 of 1978, section 6 of Act 106 of 1980, section 2 of Act 99 of 1981, section 2 of Act 118 of 1984, section 3 of Act 81 of 1985, section 3 of Act 86 of 1987, section 4 of Act 87 of 1988 and section 1 of Act 69 of 1989

 

Section 9 of the Transfer Duty Act, 1949, is hereby amended by the addition of the following subsection:

    

“(15) No duty shall be payable in respect of the acquisition of any property under any transaction which for purposes of the Value- Added Tax Act, 1991, is a taxable supply of goods to the person acquiring such property if­-

(a)     the transferor of the property under such transaction, in a declaration in such form as the Commissioner may, prescribe, certifies that value-added tax payable under the said Act has been paid to him in respect of the said supply by the transferee and has been accounted for by him in a relevant return required to be furnished by him under the said Act or will be so accounted for in such return within the time allowed under that Act for the rendering of such return, or where such supply was subject to the     said tax at the rate of zero per cent, such information regarding such supply as the Commissioner may require has been furnished to him;

(b)     any security required by the Commissioner for the payment of such tax has been lodged, if such tax has not yet been paid; and

(c)     the Commissioner has issued a certificate to the effect that the requirements of this subsection for the granting of the exemption have been met.”.

Section 78 (VAT) – Transitional matters

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78. Transitional matters

(1)     For the purposes of this section-

“sales tax” means the sales tax levied under the Sales Tax Act;

“Sales Tax Act” means the Sales Tax Act, 1978 (Act No. 103 of 1978), as in force immediately prior to its repeal by this Act.

[Definition of “Sales Tax Act” substituted by section 47 of Act 136 of 1991]

 [Subsection (1) amended by section 47 of Act 136 of 1991]

(2)

(a)     Where in the course of an enterprise carried on by a person registered as a vendor in terms of the Sales Tax Act that person has before the commencement date entered into an agreement for the sale of movable goods and sales tax would have been payable by him in respect of the taxable value of such sale if the said Act had not been repealed but the said tax is not payable by reason of the fact that the consideration payable by the purchaser in respect of such sale has not been paid in full before the commencement date and delivery of the said goods has not been effected before that date, the said person shall, if on the commencement date he is a vendor as defined in section 1 of this Act, be deemed for the purposes of this Act to have supplied the said goods at the time of delivery of the said goods or the time at which any payment in respect of the said consideration is made on or after the commencement date or the time at which an invoice in respect of such sale is issued on or after that date, whichever time is earliest.

(b)     Where any leased property has been leased by a vendor under the Sales Tax Act who is on the commencement date a vendor under this Act, to a lessee under a financial lease, as defined in section 1 of the Sales Tax Act, and such property is delivered to the lessee on or after that date, such property shall, notwithstanding the provisions of section 9 of this Act, be deemed for the purposes of this Act to have been supplied to the lessee under an instalment credit agreement at the time of delivery of such property.

[Paragraph (b) substituted by section 47 of Act 136 of 1991]

(3)     Where, on or after the commencement date, any amount accrues to a vendor who was a vendor for the purposes of the Sales Tax Act and the amount so accruing, or a portion thereof, would, but for the repeal of that Act, have been taken into account in the determination of a taxable value chargeable with sales tax-

(a)     in terms of section 5 (1) (c) of that Act in respect of a rental consideration for a period which ended before the said date; or

(b)     in terms of section 5 (1) (d) of that Act in respect of a taxable service completed before that date; or

(c)     in terms of section 5 (1) (e) of that Act in respect of board and lodging supplied for a period which ended before that date; or

(d)     in terms of section 5 (1) (f) of that Act in respect of accommodation let for a period which ended before that date,

value-added tax shall, notwithstanding anything in this Act to the contrary, be chargeable under this Act in respect of that amount as though such amount were consideration for a supply of goods or services supplied by the vendor on the date on which that amount accrued.

(3A) This Act shall not be construed as imposing value-added tax under section 7(1)(a) in respect of-

(a)     a provision of goods under a rental agreement entered into before the commencement date for a period which ended before that date where such goods did not constitute goods as defined in section 1 of the Sales Tax Act; or

(b)     a performance of services under an agreement entered into before that date where the performance of such services is completed before that date or such services were performed during and in respect of a period which ended before that date, if in either case such services were not taxable services as contemplated in the definition of “taxable service” in section 1 of the Sales Tax Act.

[Subsection (3A) inserted by section 47 of Act 136 of 1991]

(4)     Where the value of any supply of goods or services, as determined under section 10, includes any amount which has been taken into account by a vendor in the determination of a taxable value under the Sales Tax Act, and sales tax was chargeable in respect of such taxable value under section 5 of that Act or would have been so chargeable but for the provisions of section 6 of that Act, the value in respect of such supply shall for the purposes of the value-added tax be reduced by the said amount (but excluding so much of that amount as represents sales tax).

[Subsection (4) substituted by section 47 of Act 136 of 1991]

(5)     For the purposes of this Act, where-

(a)     goods are provided under a rental agreement for a period which commences before and ends on or after the commencement date; or

[Paragraph (a) substituted by section 47 of Act 136 of 1991]

(b)     the performance of any services is commenced before and is completed on or after that date; or

[Paragraph (b) substituted by section 47 of Act 136 of 1991]

(c)     domestic goods and services are provided for a period which commences before and ends on or after that date,

[Paragraph (c) substituted by section 47 of Act 136 of 1991]

the value of the supply, as determined under this Act, shall not be reduced to take account of any portion thereof made before the said date: Provided that-

(i)      where the goods referred to in paragraph (a) consist of fixed property, there shall be excluded from the rental consideration of the supply so much of such consideration as is attributable to the portion of the period referred to in that paragraph which ends before the said date;

(ii)     where the services referred to in paragraph (b) were not taxable services for the purposes of the Sales Tax Act-

(aa)   any progress payment in respect of that portion of the services performed before the said date shall for the purposes of this Act be ignored; and

(bb)   where any payment becomes due or is received in respect of services which were not taxable services for the purposes of the Sales Tax Act and which are commenced before and completed on or after the said date, that portion of the payment which, on the basis of a fair and reasonable apportionment, is attributable to the portion of the services performed before the said date shall be excluded from the consideration for the supply.

(6)     Where any payment is made or an invoice is issued on or after the date of promulgation of this Act and before the commencement date in respect of consideration for the supply of any goods or services (not being a transaction in respect of which a taxable value is subject to sales tax), a supply of such goods or services shall be deemed to have been made on the commencement date to the extent to which such payment or invoice relates to the provision of goods or the performance of services on or after the commencement date: Provided that this subsection shall not apply in respect of any payments customarily made or invoices customarily issued, when made or issued at regular intervals for the provision of goods or performance of services still to be provided or performed.

[Subsection (6) substituted by section 47 of Act 136 of 1991]

(7)    

(a)     In the case of a vendor who was on the day before the commencement date a vendor for the purposes of the Sales Tax Act an adjustment shall be made in the manner provided in paragraphs (c) and (d) in respect of sales tax attributable to any amount which would, but for the repeal of that Act, have been accounted for under paragraph (d), (i), (iv) or (vi) of subsection (2) of section 11 of that Act.

(b)     The sales tax attributable to such amount shall be determined by applying the formula

              r                 x   t

         100 + r

in which formula “r” is the rate of sales tax, expressed as a percentage, which was in force on the day before the commencement date and “t” is the said amount.

(c)     The adjustment shall be made in the tax period of the vendor under this Act which, as nearly as possible, corresponds with the tax period of the vendor which would, but for the repeal of the Sales Tax Act, have applied under that Act.

(d)     The adjustment shall be made by including in the amounts of output tax accounted for under section 16(3) of this Act in respect of the relevant tax period under this Act the amount of sales tax attributable to the amount that would have been accounted for under paragraph (d) of subsection (2) of section 11 of the Sales Tax Act and by including in the amounts of input tax accounted for under the said section 16(3) such amount as would have been accounted for under paragraph (i), (iv) or (vi) of the said subsection (2).

(8)     Where, in the case of a vendor who was for the purposes of the Sales Tax Act a liquor trader as defined in paragraph 1 of the Schedule to Government Notice No. 339 published in Government Gazette No. 10615 on 20 February 1987, an amount of an excess referred to in paragraph 4 (2) of that Schedule could, but for the repeal of the Sales Tax Act, have been carried forward from the tax period under that Act ending on the day before the commencement date, that amount shall, if on that date he continued to carry on the trade of selling liquor, for the purposes of section 16(3) of this Act be deemed to be input tax paid by him in respect of a supply of liquor made to him on that date.

(9)    

(a)     Notwithstanding the provisions of subsection (6), where fixed property has been disposed of under an agreement for the sale of such property concluded before the commencement date, the disposal of such property under such sale shall be deemed not to be a supply of goods for the purposes of this Act: Provided that where an agreement for the construction of improvements on such property has been concluded before the said date and the consideration payable under such agreement is in terms of section 6(1)(c) of the Transfer Duty Act, 1949 (Act No. 40 of 1949), required for the purpose of the payment of transfer duty to be added to the consideration payable in respect of the acquisition of such property, such agreement and the agreement for the sale of the property shall for the purposes of this paragraph be deemed to be one agreement for the sale of the property.

[Paragraph (a) substituted by section 47 of Act 136 of 1991 and amended by section 42 of Act 136 of 1992]

(aA) Where an agreement for 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, was concluded on or before 31 March 1992 by a vendor who at the time of such sale holds such fixed property as trading stock, such sale shall, if the dwelling concerned was completed within 12 months before the commencement date, be deemed not to be a supply of goods for the purposes of this Act.

[Paragraph (aA) inserted by section 42 of Act 136 of 1992]

(aB) Where an agreement (other than an agreement referred to in paragraph (aC) for the sale of fixed property consisting of land, or of any real right conferring a right of occupation of land, was concluded on or after the commencement date and on or before 31 March 1992 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, the tax chargeable under section 7(1)(a) in respect of the supply of the land or real right under such sale shall be reduced to an amount equal to 6 per cent of the value of the supply.

[Parargraph (aB) inserted by section 42 of Act 136 of 1992]

(aC) Where fixed property includes a dwelling, and-

(i)      the erection of the dwelling was completed on or after 30 September 1991 and on or before 31 December 1991 and an agreement for the sale of such fixed property was concluded on or after 22 August 1991 and on or before 31 December 1991, the tax chargeable under section 7(1) (a) in respect of the supply of the fixed property under such sale shall be reduced to an amount equal to 3 per cent of the value of the supply; or

(ii)     the erection of the dwelling was completed on or after 30 September 1991 and on or before 31 March 1992 and an agreement for the sale of such fixed property was concluded on or after 22 August 1991 and on or before 31 March 1992, the tax chargeable under section 7(1)(a) in respect of the supply of the fixed property under such sale shall, subject to the provisions of subparagraph (i), be reduced to an amount equal to 6 per cent of the value of the supply:

Provided that-

(i)      where an agreement has been concluded for the erection of a dwelling on land supplied under a sale and the consideration payable under such agreement would in terms of section 6(1)(c) of the Transfer Duty Act, 1949, if that Act were applicable, be required for the purpose of the payment of transfer duty to be added to the consideration payable in respect of the acquisition of the property, such agreement and the sale shall, subject to the provisions of paragraph (ii) of this proviso, for the purposes of this paragraph be deemed to be one agreement for the sale of the property;

(ii)     the tax payable in respect of the supply of the land and the supply of the construction services in respect of the erection of a dwelling as contemplated in paragraph (i), shall be separately payable in respect of each supply in accordance with the provisions of this Act;

(iii)    where the agreement for the sale of such fixed property was concluded before the commencement date, the provisions of paragraph (a) of this subsection shall apply unless the seller and the purchaser under the sale agree in writing that that paragraph shall not apply and that this paragraph shall apply.

[Paragraph (aC) inserted by section 42 of Act 136 of 1992]

(aD) Where any agreement (other than an agreement referred to in paragraph (i) of the proviso to paragraph (aC)) for the construction by any vendor carrying on a construction enterprise of any new dwelling was concluded on or before 31 March 1992 and the dwelling was to be erected in the course of such enterprise, the tax chargeable under section 7(1)(a) in respect of the supply of the construction service, including any construction service supplied to the vendor by a subcontractor, shall to the extent that such services were performed on or before 31 March 1992 be reduced to 6 per cent of the value of the supply.

[Paragraph (aD) inserted by section 42 of Act 136 of 1992]

(b)     For the purposes of this subsection where an option to purchase fixed property or a right of pre-emption in respect of fixed property is granted, the agreement for the sale of the property shall be deemed to be concluded when the option or right of pre-emption is exercised.

(10)   Where any vendor who is on or with effect from the commencement date registered under section 23 and on that date-

(a)     carries on a construction, civil engineering or similar enterprise and has on hand a stock of materials acquired by him prior to that date in order to be used by him for the purpose of incorporation in any building or other structure or work of a permanent nature to be erected, constructed, assembled, installed, extended or embellished by him in the course of such enterprise, and sales tax has been borne by him in respect of such materials; or

(b)     has on hand a stock of consumable goods or maintenance spares acquired under sales concluded by him or the importation by him prior to that date for the purpose of consumption or use in the course of his enterprise, and sales tax has been borne by him in respect of such sales or importation,

[Paragraph (b) substituted by section 42 of Act 136 of 1992]

and on or after that date any item of such stock is withdrawn by him for the purpose referred to in paragraph (a) or the purpose referred to in paragraph (b), as the case may be, the vendor may, provided he has taken stock of such materials, consumable goods or maintenance spares, as the case may be, and he retains properly prepared stock lists in respect of such stocktaking, include in the amounts of input tax deducted by him under section 16(3) in respect of the tax period during which such item is withdrawn, the amount of sales tax borne by him in respect of that item: Provided that where the vendor does not maintain records which are adequate enough to determine when items are withdrawn from such stocks or the sales tax so borne thereon in respect of sales to him of such items, the Commissioner may, on application by the vendor, authorize him to deduct the actual sales tax borne by him in respect of such sales or an amount of sales tax which on the basis of a reasonable calculation represents the amount of sales tax so borne by him on the stocks in equal instalments by way of inclusions in the input tax deducted by the vendor in his tax returns over a period of two years or such shorter period as the Commissioner may allow.

[Subsection (10) substituted by section 47 of Act 136 of 1991]

(10A) Where sales tax has been borne by any vendor (being a person who is on or with effect from the commencement date registered under section 23) in respect of the acquisition of goods (other than fixed property or goods incorporated therein) under a sale or the importation of goods and such goods are held by him on the commencement date as trading stock as defined in section 1 of the Income Tax Act, whether or not the vendor is liable for normal tax under that Act, the vendor may, provided he has taken stock of such goods and he retains properly prepared stock lists in respect of such stocktaking, include the amount of that tax in the amount of input tax deducted by him under section 16(3) in respect of the tax period during which such goods are supplied by him in the course or furtherance of his enterprise: Provided that where it appears to the Commissioner that the keeping of records for the purposes of the preceding provisions of this subsection can be dispensed with without prejudice to revenue collections, the Commissioner may, on application by the vendor, authorize him to deduct the sales tax on stocks of such goods so held by the vendor in equal instalments by way of inclusions in the input tax deducted by the vendor in his tax returns over a period of two years or such shorter period as the Commissioner may allow.

[Subsection (10A) inserted by section 47 of Act 136 of 1991]

(11)  

(a)     Where any person-

(i)      is on the day before the commencement date registered as a vendor under the Sales Tax Act;

(ii)     at the end of that day has in his possession goods (as defined in that Act) which he has not disposed of or which he has disposed of under a sale but for which he has not received full payment and in either case sales tax was not borne by him on acquisition; and

(iii)  on the commencement date is not a vendor for the purposes of this Act,

he shall for the purposes of the Sales Tax Act be deemed to have applied such goods on the day referred to in subparagraph (i) to a use or consumption contemplated in section 5 (1) (h) of that Act.

[Paragraph (a) amended by section 47 of Act 136 of 1991]

(b)     Any sales tax payable under the Sales Tax Act in respect of the taxable value of such goods shall be payable at the rate of 10 percent and may be paid to the Commissioner within the period of three months reckoned from the day after the commencement date, without penalty.

[Paragraph (b) amended by section 47 of Act 136 of 1991 and section 42 of Act 136 of 1992]

Section 75 (VAT) – Tax agreements

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75. Tax agreements

(1)     The National Executive may enter into an agreement with the government of any other country whereby arrangements are made with that government with a view to-

(a)     the prevention, mitigation or discontinuance of the levying, under the laws of the Republic and such other country, of value-added tax or any similar tax where the supply of goods or services is subject to such tax in either the Republic or such other country and such supply or the importation of such goods or services is also subject to such tax in the other country which is a party to the agreement;

(b)     the refunding of value-added tax or any similar tax, or any portion of such value-added tax or similar tax, levied under the laws of the Republic and such other country in respect of the supply of goods or services in the Republic or such other country, as the case may be, where such goods or services are imported into such other country or the Republic, as the case may be;

(c)     regulating or co-ordinating any matter with regard to the levying and collection, under the laws of the Republic and such other country, of value-added tax or any similar tax; or

(d)     the rendering of reciprocal assistance in the administration of and the collection of value-added tax or any similar tax under the laws of the Republic and such other country, or in respect of the execution of the arrangements provided for in any agreement entered into in terms of this section.

[Subsection (1) substituted by section 52 of Act 27 of 1997]

(2)     As soon as may be possible after the approval by Parliament of any such agreement, as contemplated in section 231 of the Constitution, the arrangements thereby made shall be notified by publication in the Gazette and thereupon the arrangements so notified shall have effect as if enacted by this Act.

[Subsection (2) substituted by section 52 of Act 27 of 1997]

(3)     ……….

[Subsection (3) deleted by section 52 of Act 27 of 1997]

(4)     ……….

[Subsection (4) deleted by section 52 of Act 27 of 1997]

(5)     The duty imposed by this Act to preserve secrecy with regard to such tax shall not prevent the disclosure to any authorized SARS official of the country contemplated in subsection (1) of any information necessary for the proper execution of the agreement notified in terms of subsection (2).

[Subsection (5) substituted by section 52 of Act 27 of 1997]

[Section 75 amended by section 45 of Act 136 of 1991 and section 41 of Act 136 of 1992 and substituted by section 29 of Act 20 of 1994]


76. ……….

[Section 76 amended by section 46 of Act 136 of 1991 and section 43 of Act 97 of 1993 and repealed by section 30 of Act 20 of 1994]

77. ……….

[Section 77 substituted by section 31 of Act 20 of 1994 and repealed by section 86 of Act 15 of 2016 effective on 19 January 2017]

Section 74 (VAT) – Schedules and Regulations

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74. Schedules and Regulations

[Heading substituted by section 188 of Act 45 of 2003]

(1)     The Minister may make regulations in regard to any matter which is permitted or required by this Act and generally for the better carrying out of the objects and purposes of this Act.

(1A)  The Minister may make regulations prescribing the information that must be contained in a report that the Commissioner must submit to the Minister, in the form and manner and at the time that the Minister may prescribe, advising the Minister of matters as the Minister may prescribe by Regulation.

[Subsection (1A) inserted by section 20 of Act 14 of 2017 effective on 1 March 2017]

(2)     Notwithstanding anything to the contrary in this Act, where the Minister is satisfied that in consequence of the manner in which any business, trade or occupation is carried on malpractices or difficulties have arisen or may arise in regard to the collection of tax levied under this Act, the Minister may, in order to counter such malpractices or to overcome such difficulties, make regulations in regard to the application of any rate of zero per cent or any exemption or to the payment or collection of any tax in a manner other than that provided in this Act.

(3)

(a)     Whenever the Minister amends any Schedule under any provision of the Customs and Excise Act, 1964 (Act No. 91 of 1964), by notice in the Gazette and it is necessary to amend in consequence thereof Schedule 1 of this Act, the Minister may by like notice amend the said Schedule 1.

(b)     The provisions of section 48(6) of the Customs and Excise Act, 1964, shall apply mutatis mutandis in respect of any amendment by the Minister under this subsection.

[Subsection (3) added by section 188 of Act 45 of 2003]

Section 73 (VAT) – Schemes for obtaining undue tax benefits

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73. Schemes for obtaining undue tax benefits

 

(1)     Notwithstanding anything in this Act, whenever the Commissioner is satisfied that any scheme (whether entered into or carried out before or after the commencement of this Act, and including a scheme involving the alienation of property)-

 

(a)     has been entered into or carried out which has the effect of granting a tax benefit to any person; and

(b)     having regard to the substance of the scheme-

(i)      was entered into or carried out by means or in a manner which would not normally be employed for bona fide business purposes, other than the obtaining of a tax benefit; or

(ii)     has created rights or obligations which would not normally be created between persons dealing at arm’s length; and

(c)     was entered into or carried out solely or mainly for the purpose of obtaining a tax benefit,

 

the Commissioner shall determine the liability for any tax imposed by this Act, and the amount thereof, as if the scheme had not been entered into or carried out, or in such manner as in the circumstances of the case he deems appropriate for the prevention or diminution of such tax benefit.

 

(2)     For the purposes of this section-

 

“scheme” includes any transaction, operation, scheme or understanding (whether enforceable or not), including all steps and transactions by which it is carried into effect;

“tax benefit” includes-

 

(a)     any reduction in the liability of any person to pay tax; or

(b)     any increase in the entitlement of any vendor to a refund of tax; or

(c)     any reduction in the consideration payable by any person in respect of any supply of goods or services; or

(d)     any other avoidance or postponement of liability for the payment of any tax, duty or levy imposed by this Act or by any other law administered by the Commissioner.

 

(3)     Any decision of the Commissioner under this section shall be subject to objection and appeal, and whenever in proceedings relating thereto it is proved that the scheme concerned does or would result in a tax benefit, it shall be presumed, until the contrary is proved that such scheme was entered into or carried out solely or mainly for the purpose of obtaining a tax benefit.

Section 72 (VAT) – Arrangements and decisions to overcome difficulties, anomalies or incongruities

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72. Decisions to overcome difficulties, anomalies or incongruitie

(1)     If in any case the Commissioner is satisfied that in consequence of the manner in which any vendor or class of vendors conducts his, her or their business, trade or occupation, difficulties, anomalies or incongruities have arisen or may arise in regard to the application of any of the provisions of this Act and similar difficulties, anomalies or incongruities have arisen or may arise for any other vendor or class of vendors of the same kind or who make similar supplies of goods or services, the Commissioner may make a decision as to-

(a)       the manner in which such provisions shall be applied; or

(b)       the calculation or payment of tax provided in this Act,

in the case of such vendor or class of vendors or any person transacting with such vendor or class of vendors as appears to overcome such difficulties, anomalies or incongruities: Provided that such decision shall not-

(i)      have the effect of reducing or increasing the liability for tax levied under this Act; or

(ii)     be contrary to the construct and policy intent of this Act as a whole or any specific provision in this Act.

(2)    Sections 75, 81, 83, 84, 85, 86, 87, 89 and 90 of the Tax Administration Act apply mutatis mutandis to a decision under subsection (1) and for this purpose the definitions of a “binding class ruling” and a “binding private ruling” are not limited to a “proposed transaction”.

(3)     The Commissioner may publish by public notice a list of transactions or matters in respect of which the Commissioner may decline to make a decision.

[Section 72 substituted by section 28 of Act 20 of 1994, by section 271 read with paragraph 146 of Schedule 1 of Act 28 of 2011 and by section 73(1) of Act 34 of 2019 deemed effective on 21 July, 2019 and applicable in respect of all applications made on or after that date]