12. Exempt supplies
The supply of any of the following goods or services shall be exempt from the tax imposed under section 7(1)(a):
(a) The supply of any financial services, but excluding the supply of financial services which, but for this paragraph, would be charged with tax at the rate of zero per cent under section 11;
[Paragraph (a) substituted by section 18 of Act 136 of 1992, section 14 of Act 20 of 1994 and section 22 of Act 37 of 1996]
(b) the supply by any association not for gain of any donated goods or services or any other goods made or manufactured by such association if at least 80 per cent of the value of the materials used in making or manufacturing such other goods consists of donated goods;
(c) the supply of-
(i) a dwelling under an agreement for the letting and hiring thereof, and any ‘right of occupation’ as defined in section 1 of the Housing Development Schemes for Retired Persons Act, 1988 (Act No. 65 of 1988);
[Subparagraph (i) substituted by section 99 of Act 32 of 2004]
(ii) lodging or board and lodging-
(aa) by the employer of the recipient (including an employer as defined in paragraph 1 of the Fourth Schedule to the Income Tax Act), where the recipient is entitled to occupy the accommodation as a benefit of his or her office or employment and his or her right thereto is limited to the period of his or her employment or the term of his or her office or a period agreed upon by the supplier and the recipient;
(bb) by the employer of the recipient, where the employer operates a hostel or boarding establishment mainly for the benefit of the employees otherwise than for the purpose of making profit; or
(cc) ……….
[Item (cc) deleted by section 45 of Act 9 of 2006]
[Paragraph (c) amended by section 69 of Act 19 of 2001 and substituted by section 154 of Act 60 of 2001 and section 117 of Act 74 of 2002]
(d) the supply of leasehold land by way of letting (not being a grant or sale of the lease of that land) to the extent that that land is used or is to be used for the principal purpose of accommodation in a dwelling erected or to be erected on that land;
(e) the supply of land (together with any improvements to such land existing on the date on which the supplier became contractually obliged to supply such land and such existing improvements to the recipient) where such land is situated outside the Republic and such supply is made by way of sale or by way of letting;
(f) the supply of any services to any of its members in the course of the management of-
(i) a body corporate as defined in section 1 of the Sectional Titles Act, 1986 (Act No. 95 of 1986);
[Subparagraph (i) amended by section 170 of Act 31 of 2013 effective on 1 April 2014]
(ii) a share block company;
[Subparagraph (ii) amended by section 18 of Act 136 of 1992 and section 170 of Act 31 of 2013 effective on 1 April 2014]
(iii) any housing development scheme as defined in the Housing Development Schemes for Retired Persons Act, 1988 (Act No. 65 of 1988); or
[Subparagraph (iii) substituted by section 18 of Act 136 of 1992 and amended by section 170 of Act 31 of 2013 effective on 1 April 2014]
(iv) any association of persons (other than a company registered or deemed to be registered under the Companies Act, 2008 (Act No. 71 of 2008), any co-operative, close corporation or trust, but including a non-profit company as defined in section 1 of the Companies Act, 2008 (Act No. 71 of 2008)) where the Commissioner is satisfied that, subject to such conditions as he or she may deem necessary, such association of persons-
(A) has been formed solely for purposes of managing the collective interests of residential property use or ownership of all its members, which includes expenditure applicable to the common immovable property of such members and the collection of levies for which such members are liable; and
(B) is not permitted to distribute any of its funds to any person other than a similar association of persons,
[Subparagraph (iv) added by section 170 of Act 31 of 2013 effective on 1 April 2014]
where the cost of supplying such services is met out of contributions levied by such body corporate, share block company or under such housing development scheme or association, as the case may be: Provided that this paragraph shall not apply or shall apply to a limited extent where such body corporate, share block company, scheme or association applies in writing to the Commissioner, and the Commissioner, having regard to the circumstances of the case, directs with effect from a future date that the provisions of this paragraph shall not apply to that body corporate, share block company, scheme or association or that the provisions of this paragraph shall apply only to a limited extent specified by him: Provided further that this paragraph shall not apply to the services supplied by any body corporate, share block company, scheme or association which manages a property time-sharing scheme as defined in section 1 of the Property Time-sharing Control Act, 1983 (Act No. 75 of1983);
[Words following subparagraph (iv) substituted by section 170 of Act 31 of 2013 effective on 1 April 2014]
[Paragraph (f) amended by section 28 of Act 97 of 1993]
(g) the supply by any person in the course of a transport business of any service comprising the transport by that person in a vehicle (other than a game viewing vehicle contemplated in paragraph (e) of the definition of ‘motor car’ in section 1) operated by him of fare-paying passengers and their personal effects by road or railway (excluding a funicular railway), not being a supply of any such service which, but for this paragraph, would be charged with tax at the rate of zero per cent under section 11(2)(a);
[Paragraph (g) substituted by section 28 of Act 136 of 1991, section 29 of Act 27 of 1997 and section 99 of Act 32 of 2004]
(h)
(i) the supply of educational services-
(aa) provided by the State or a school registered under the South African Schools Act, 1996 (Act No. 84 of 1996), or a public college or private college established, declared or registered as such under the Further Education and Training Colleges Act, 2006 (Act No. 16 of 2006).
[Item (aa) substituted by section 109 of Act 60 of 2008]
(bb) by an institution that provides higher education on a full time, part-time or distance basis and which is established or deemed to be established as a public higher education institution under the Higher Education Act, 1997 (Act No. 101 of 1997), or is declared as a public higher education institution under that Act, or is registered or conditionally registered as a private higher education institution under that Act; or
(cc) by any public benefit organisation as contemplated in paragraph (a) of the definition of ‘public benefit organisation’ contained in section 30(1) of the Income Tax Act that has been approved by the Commissioner in terms of section 30(3) of that Act and which has been formed for-
(A) adult basic education and training including literacy and numeracy education, registered under the Adult Basic Education and Training Act, 2000 (Act No. 52 of 2000), vocational training or technical education;
[Subitem (A) substituted by section 82 of Act 20 of 2006]
(B) the education and training of religious or social workers;
[Subitem (B) substituted by section 82 of Act 20 of 2006]
(C) training or education of persons with a permanent physical or mental impairment;
(D) ……….
[Subitem (D) deleted by section 99 of Act 32 of 2004]
(E) provision of bridging courses to enable indigent persons to enter a higher education institution as envisaged in subparagraph (bb);
[Subitem (E) substituted by section 82 of Act 20 of 2006]
[Item (cc) amended by section 45 of Act 9 of 2006 and section 82 of Act 20 of 2006]
(ii) the supply by a school, university, technikon or college solely or mainly for the benefit of its learners or students of goods or services (including domestic goods and services) necessary for and subordinate and incidental to the supply of services referred to in subparagraph (i) of this paragraph, if such goods or services are supplied for a consideration in the form of school fees, tuition fees or payment for lodging or board and lodging; or
[Subparagraph (ii) substituted by section 117 of Act 74 of 2002, amended by section 82 of Act 20 of 2006 and substituted by section 133 of Act 25 of 2015 effective on 1 April 2016]
(iii) the supply of services to learners or students or intended learners or students by the joint Matriculation Board referred to in section 15 of the Universities Act, 1955 (Act No. 61 of 1955):
[Subparagraph (iii) added by section 99 of Act 32 of 2004]
Provided that vocational or technical training provided by an employer to his employees and employees of an employer who is a connected person in relation to that employer does not constitute the supply of an educational service for the purposes of this paragraph;
[Paragraph (h) amended by section 18 of Act 136 of 1992 and section 14 of Act 20 of 1994 and substituted by section 154 of Act 60 of 2001]
(i) the supply of any goods or services by an employee organization to any of its members to the extent that the consideration for such supply consists of membership contributions.
[Paragraph (i) added by section 18 of Act 136 of 1992]
(j) the service of caring for children by a creche or an after-school care centre.
[Paragraph (j) added by section 154 of Act 60 of 2001]
(k) the supply of goods in the Republic by any person that is not a resident of the Republic and that is not a vendor, other than the supply of goods by an inbound duty and tax free shop, which have not been entered for home consumption: Provided that this paragraph shall not apply where such person applies in writing to the Commissioner, and the Commissioner, having regard to the circumstances of the case, directs that the provisions of this paragraph shall not apply to such person;
[Paragraph (k) inserted by section 109 of Act 60 of 2008 and substituted by section 147 of Act 22 of 2012 effective on 1 January 2013]
(l) the supply of any goods or services by a bargaining council that is established in terms of section 27 of the Labour Relations Act, 1995 (Act No. 66 of 1995), to any of its members in terms of section 28(1) of that Act;
[Paragraph (l) inserted by section 147 of Act 22 of 2012 and substituted by section 97 of Act 43 of 2014 effective on 1 April 2015]
(m) the supply of any goods or services by a political party registered in terms of section 15 of the Electoral Commission Act, 1996 (Act No. 51 of 1996), to any of its members to the extent that the consideration for such supply consists of membership contributions.
[Paragraph (m) inserted by section 147 of Act 22 of 2012 effective on 1 January 2013]