Reproduced under Goverment Printer’s Authorisation (Authorisation No. 11779) dated 25 August 2017.

Please remember to periodically “Check for Updates”!

VALUE-ADDED TAX ACT 89 OF 1991

(English text signed by the State President)

[Assented to: 5 June 1991]

[Commencement Date: 30 September 1991]

as amended by:

Government Notice No. R288 of GG 37554 of 2014

Taxation Laws Amendment Act 43 of 2014

Tax Administration Laws Amendment Act 44 of 2014

Taxation Laws Amendment Act 43 of 2014

Tax Administration Laws Amendment Act 23 of 2015

Taxation Laws Amendment Act 25 of 2015

Government Notice No. R723 of GG 39100 of 2015

Government Notice No. R558 of GG 40004 of 2016

Taxation Laws Amendment Act 15 of 2016

Tax Administration Laws Amendment Act 16 of 2016

Tax Administration Laws Amendment Act 13 of 2017

Rates and Monetary Amounts and Amendment of Revenue Laws Act 14 of 2017

Taxation Laws Amendment Act 17 of 2017

Rates and Monetary Amounts and Amendment of Revenue Laws Act 21 of 2018

Tax Administration Laws Amendment Act 22 of 2018

Taxation Laws Amendment Act 23 of 2018

Tax Administration Laws Amendment Act 33 of 2019

Taxation Laws Amendment Act 34 of 2019

Government Notice R226 – Government Gazette 43051 of 28 February 2020

Taxation Laws Amendment Act 23 of 2020

Tax Administration Laws Amendment Act 24 of 2020

Tax Administration Laws Amendment Act 16 of 2022

Taxation Laws Amendment Act 20 of 2022

Latest 2024 Live Updates: COMPLETED (including 1 April 2024 amendments)!

Taxation Laws Amendment Act 17 of 2023

Tax Administration Laws Amendment Act 18 of 2023

To report an issue, please contact us at service@hApp-e-tax.co.za

ACT

To provide for taxation in respect of the supply of goods and services and the importation of goods; to amend the Transfer Duty Act, 1949, so as to provide for an exemption; to amend the Stamp Duties Act, 1968, so as to provide for an exemption from stamp duty and to discontinue the levying of certain stamp duties; to repeal the Sales Tax Act, 1978; and to provide for matters connected therewith.

ARRANGEMENT OF SECTIONS

Section 1 – Definitions

Section 2 – Financial services

Section 3 – Determination of “open market value”

PART I

ADMINISTRATION

Section 4 – Administration of Act

Section 5 – Exercise of powers and performance of duties

Section 6 – [Repealed]

PART II

VALUE-ADDED TAX

Section 7 – Imposition of value-added tax

Section 8 – Certain supplies of goods or services deemed to be made or not made

Section 8A – Sharia compliant financing arrangements

Section 9 – Time of supply

Section 10 – Value of supply of goods or services

Section 11 – Zero rating

Section 12 – Exempt supplies

Section 13 – Collection of tax on importation of goods, determination of value thereof and exemptions from tax

Section 14 – Collection of value-added tax on imported services, determination of value thereof and exemptions from tax

Section 15 – Accounting basis

Section 16 – Calculation of tax payable

Section 17 – Permissible deductions in respect of input tax

Section 18 – Change in use adjustments

Section 18A – Adjustments in consequence of acquisition of going concern wholly or partly for purposes other than making taxable supplies

Section 18B – Temporary letting of residential fixed property

Section 18C – Adjustments for leasehold improvements

Section 18D – Temporary letting of residential property

Section 19 – Goods or services acquired before incorporation

Section 20 – Tax invoices

Section 21 – Credit and debit notes

Section 22 – Irrecoverable debts

PART III

REGISTRATION

Section 23 – Registration of persons making supplies in the course of enterprises

Section 24 – Cancellation of registration

Section 25 – Vendor to notify change of status

Section 26 – Liabilities not affected by person ceasing to be vendor

PART IV

RETURNS, PAYMENTS AND ASSESSMENTS

Section 27 – Tax period

Section 28 – Returns and payments of tax

Section 29 – Special records and payments

Section 30 – [Repealed]

Section 31 – Assessments

PART V

OBJECTIONS AND APPEALS

Section 32 – Objections to certain decisions

Section 33 – [Repealed]

Section 34 – [Repealed]

Section 35 – [Repealed]

Section 36 – [Repealed]

Section 37 – [Repealed]

PART VI

PAYMENT, RECOVERY AND REFUND OF TAX

Section 38 – Manner in which tax shall be paid

Section 39 – Penalty for failure to pay tax when due

Section 40 – [Repealed]

Section 40A – [Repealed]

Section 40B – [Repealed]

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

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

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

Section 41A – [Repealed]

Section 41B – VAT class ruling and VAT ruling

Section 42 – [Repealed]

Section 43 – [Repealed]

Section 44 – Refunds

Section 45 – Interest on delayed refunds

Section 45A – Calculation of interest payable under this Act

PART VII

REPRESENTATIVE VENDORS

Section 46 – Persons acting in a representative capacity

Section 47 – [Repealed]

Section 48 – [Repealed]

Section 49 – [Repealed]

PART VIII

SPECIAL PROVISIONS

Section 50 – Separate enterprises, branches and divisions

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

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

Section 52 – Pooling arrangements

Section 53 – Death or insolvency of vendor

Section 54 – Agents and auctioneers

Section 54A – Advance Tax Rulings

PART IX

COMPLIANCE

Section 55 – Records

Section 56 – [Repealed]

Section 57 – [Repealed]

Section 58 – Offences

Section 59 – [Repealed]

Section 60 – [Repealed]

Section 61 – Recovery of tax from recipient

Section 62 – [Repealed]

Section 63 – [Repealed]

PART X

MISCELLANEOUS

Section 64 – Prices deemed to include tax

Section 65 – Prices advertised or quoted to include tax

Section 66 – Rounding-off of tax

Section 67 – Contract price or consideration may be varied according to rate of value-added tax  

Section 67A – Application of increased or reduced tax rate

Section 68 – Tax relief allowable to certain diplomats and diplomatic and consular missions

Section 69 – [Repealed]

Section 70 – [Repealed]

Section 71 – [Repealed]

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

Section 73 – Schemes for obtaining undue tax benefits

Section 74 – Schedules and Regulations

Section 75 – Tax agreements

Section 76 – [Repealed]

Section 77 – [Repealed]

Section 78 – Transitional matters

Section 78A – Transitional matters: Turnover Tax

Section 79 – Amendment of section 9 of Act 40 of 1949

Section 80 – Amendment of section 12 of Act 40 of 1949

Section 81 – Amendment of section 23 of Act 77 of 1968

Section 82 – Amendment of section 24 of Act 77 of 1968

Section 83 – Amendment of Item 15 of Schedule 1 to Act 77 of 1968

Section 84 – Amendment of Item 18 of Schedule 1 to Act 77 of 1968

Section 85 – Repeal of laws

Section 86 – Act binding on State, and effect of certain exemptions from taxes

Section 86A – Provisions relating to special economic zones

Section 87 – Short title

Schedule 1 – Exemption: certain goods imported into the Republic

Schedule 2 – Zero rate: supply of goods used or consumed for agricultural, pastoral or other farming purposes

Schedule 3 – Laws repealed

“adjusted cost”, means the cost of any goods or services where tax has been charged or would have been charged if section 7 of this Act had been applicable prior to the commencement date, in respect of the supply of goods and services or if the vendor was or would have been entitled to an input tax deduction in terms of paragraph (b) of the definition of “input tax”;

[Definition of “adjusted cost” inserted by section 164 of Act 45 of 2003]

“ancillary transport services” means stevedoring services, lashing and securing services, cargo inspection services, preparation of customs documentation, container handling services and storage of transported goods or goods to be transported;

“association not for gain” means-

(a)     any religious institution of a public character; or

(b)     any other society, association or organization, whether incorporated or not (other than an educational institution in respect of which the provisions of paragraph (c) apply), which-

(i)    is carried on otherwise than for the purposes of profit or gain to any proprietor, member or shareholder; and

(ii)   is, in terms of its memorandum, articles of association, written rules or other document constituting or governing the activities of that society, association or organization-

(aa)   required to utilize any property or income solely in the furtherance of its aims and objects; and

(bb)   prohibited from transferring any portion thereof directly or indirectly in any manner whatsoever so as to profit any person other than by way of the payment in good faith of reasonable remuneration to any officer or employee of the society, association or organization for any services actually rendered to such society, association or organization; and

(cc)   upon the winding-up or liquidation of such society, association or organization, obliged to give or transfer its assets remaining after the satisfaction of its liabilities to some other society, association or organization with objects similar to those of the said society, association or organization; or

[Paragraph (b) substituted by section 23 of Act 27 of 1997]

(c)     any educational institution of a public character, whether incorporated or not, which-

(i)      is carried on otherwise than for the purposes of profit or gain to any proprietor, member or shareholder; and

(ii)     is, in terms of its memorandum, articles of association, written rules or other document constituting or governing the activities of that educational institution-

(aa)   required to utilize any property or income solely in the furtherance of its aims and objects; and

(bb)   prohibited from transferring any portion thereof directly or indirectly in any manner whatsoever so as to profit any person other than by way of the payment in good faith of reasonable remuneration to any officer or employee of the educational institution for any services actually rendered to such institution;

[Paragraph (c) added by section 23 of Act 27 of 1997]

“cash value”, in relation to the supply of goods supplied under an instalment credit agreement or by a surrender of goods as defined in this section, means-

[Words preceding paragraph (a) substituted by section 165 of Act 31 of 2013 effective on 1 April 2014]

(a)     where the seller or lessor is a banker or financier, an amount equal to or exceeding the sum of the cost to the banker or financier of the goods, including any cost of erection, construction, assembly or installation of the goods borne by the banker or financier and the tax leviable under section 7(1)(a) in respect of such supply by the banker or financier; or

(b)     where the seller or lessor is a dealer, an amount equal to or exceeding the price (including tax) at which the goods are normally sold by him for cash or may normally be acquired from him for cash (including tax) and any charge (including tax) made by the seller or lessor in respect of the erection, construction, assembly or installation of the goods if such charge is financed by the seller or lessor under the instalment credit agreement;

“close corporation” means a close corporation within the meaning of the Close Corporations Act, 1984 (Act No. 69 of 1984);

“commencement date” means 30 September, 1991;

[Definition of “commencement date” substituted by section 21 of Act 136 of 1991]

“commercial accommodation” means-

(a)     lodging or board and lodging, together with domestic goods and services, in any house, flat, apartment, room, hotel, motel, inn, guest house, boarding house, residential establishment, holiday accommodation unit, chalet, tent, caravan, camping site, houseboat, or similar establishment, which is regularly or systematically supplied but excluding a dwelling supplied in terms of an agreement for the letting and hiring thereof;

[Paragraph (a) substituted by section 47 of Act 12 of 2003, section 81 of Act 8 of 2007, section 68 of Act 3 of 2008 and section 128 of Act 25 of 2015 effective on 1 April 2016]

(b)     lodging or board and lodging in a home for the aged, children, physically or mentally handicapped persons; and

(c)     lodging or board and lodging in a hospice;

[Definition of “commercial accommodation” inserted by section 65 of Act 19 of 2001 and substituted by section 148 of Act 60 of 2001]

“Commissioner” means the Commissioner for the South African Revenue Service appointed in terms of section 6 of the South African Revenue Service Act, 1997 (Act No. 34 of 1997), or the Acting Commissioner designated in terms of section 7 of that Act;

[Definition of “Commissioner” substituted by section 34 of Act 34 of 1997 and section 271 of Act 28 of 2011 effective on 1 October 2012]

“company” means a company as defined in section 1 of the Income Tax Act;

“connected persons” means-

(a)     any natural person (including the estate of a natural person if such person is deceased or insolvent) and-

(i)      any relative of that natural person (being a relative as defined in section 1 of the Income Tax Act) or the estate of any such relative if the relative is deceased or insolvent; or

(ii)   any trust fund in respect of which any such relative or such estate of such relative is or may be a beneficiary; or

[Paragraph (a) substituted by section 22 of Act 97 of 1993]

(b)     any trust fund and any person who is or may be a beneficiary in respect of that fund; or

(c)     any partnership or close corporation and-

(i)      any member thereof; or

(ii)   any other person where that person and a member of such partnership or close corporation, as the case may be, are connected persons in terms of this definition; or

(d)     any company (other than a close corporation) and-

(i)      any person (other than a company) where that person, his spouse or minor child or any trust fund in respect of which that person, his spouse or minor child is or may be a beneficiary, is separately interested or two or more of them are in the aggregate interested in 10 per cent or more of the company’s paid-up capital or 10 per cent or more of the company’s equity shares (as defined in section 1 of the Income Tax Act) or 10 per cent or more of the voting rights of the shareholders of the company, whether directly or indirectly; or

[Subparagraph (i) substituted by section 165 of Act 31 of 2013 effective on 1 April 2012]

(ii)     any other company the shareholders in which are substantially the same persons as the shareholders in the first-mentioned company, or which is controlled by the same persons who control the first-mentioned company; or

[Subparagraph (ii) substituted by section 128 of Act 25 of 2015 effective on 1 April 2012 – Date of operation as in section 128 of Act 25 of 2015 as amended by section 106 of Act 15 of 2015]

(iii)    any person where that person and the person referred to in subparagraph (i) or his spouse or minor child or the trust fund referred to in that subparagraph or the other company referred to in subparagraph (ii) are connected persons in terms of this definition; or

(e)     any separate enterprise, branch or division of a vendor which is separately registered as a vendor under the provisions of section 50 and any other such enterprise, branch or division of the vendor; or

(f)     any branch, division or separate enterprise of an association not for gain which is deemed by subsection (5) of section 23 to be a separate person for the purposes of that section and any other branch, division or separate enterprise of that association, whether or not such other branch, division or separate enterprise is a vendor; or

[Paragraph (f) amended by section 23 of Act 27 of 1997]

(g)     any person and any superannuation scheme referred to in section 2(2)(vii), the members of which are mainly the employees or office holders or former employees or office holders of that person;

[Paragraph (g) added by section 23 of Act 27 of 1997]

“consideration”, in relation to the supply of goods or services to any person, includes any payment made or to be made (including any deposit on any returnable container and tax), whether in money or otherwise, or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of any goods or services, whether by that person or by any other person, but does not include any payment made by any person as a donation to any association not for gain: Provided that a deposit (other than a deposit on a returnable container), whether refundable or not, given in respect of a supply of goods or services shall not be considered as payment made for the supply unless and until the supplier applies the deposit as consideration for the supply or such deposit is forfeited;

[Definition of “consideration” substituted by section 92 of Act 32 of 2004 and amended by section 8 of Act 10 of 2005 with effect from 24 January 2005]

“consideration in money” includes consideration expressed as an amount of money;

“Controller” has the meaning assigned thereto in section 1 of the Customs and Excise Act;

[Definition of “Controller” inserted by section 101 of Act 31 of 2005]

“Customs and Excise Act” means the Customs and Excise Act, 1964 (Act No. 91 of 1964);

“customs controlled area” has the meaning assigned thereto in section 21A(1) of the Customs and Excise Act;

[Definition of “customs controlled area” inserted by section 164 of Act 45 of 2003 and substituted by section 165 of Act 31 of 2013 and section 23 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

“customs controlled area enterprise” has the meaning assigned thereto in section 21A(1) of the Customs and Excise Act;

[Definition of “customs controlled area enterprise” inserted by section 164 of Act 45 of 2003 and substituted by section 165 of Act 31 of 2013 and section 23 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

“designated entity” means a vendor-

(i)      to the extent that its supplies of goods and services of an activity carried on by that vendor are in terms of (b)(i) of the definition of ‘enterprise’ treated as supplies made in the course or furtherance of an enterprise;

(ii)    which is a major public entity, national government business enterprise or provincial government business enterprise listed in Schedule 2 or Part B or D of Schedule 3 of the Public Finance Management Act, 1999 (Act No. l of 1999), respectively;

[Paragraph (ii) amended by section 40 of Act 9 of 2006]

(iii)   which is a  party to a ‘Public Private Partnership Agreement’ as defined in Regulation 16 of the Treasury Regulations issued in terms of section 76 of the Public Finance Management  Act, 1999 (Act No. 1 of 1999), to the extent that that party supplies goods or services in terms of that Agreement to the ‘institution’ defined in that Regulation;

[Paragraph (iii) substituted by section 104 of Act 60 of 2008 and section 26 of Act 8 of 2010 effective on 2 November 2010]

(iv)    which is a welfare organisation;

[Paragraph (iv) amended by section 40 of Act 9 of 2006 and section 77 of Act 20 of 2006]

(v)     which is a municipal entity as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000); or

[Paragraph (v) added by section 40 of Act 9 of 2006 and amended by section 77 of Act 20 of 2006]

(vi)    which has powers similar to those of any water board listed in Part B of Schedule 3 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), which would have complied with the definition of ‘local authority’ in section 1 prior to the deletion of that definition on 1 July 2006;

[Paragraph (vi) inserted by section 77 of Act 20 of 2006]

[Definition of “designated entity” inserted by section 164 of Act 45 of 2003]

“domestic goods and services” means goods and services provided in any enterprise supplying commercial accommodation, including-

(a)     cleaning and maintenance;

(b)     electricity, gas, air conditioning or heating;

(c)     a telephone, television set, radio or other similar article;

(d)     furniture and other fittings;

(e)     meals;

(f)     laundry;

[Paragraph (f) amended by section 128 of Act 25 of 2015 effective on 1 April 2016]

(g)     nursing services; or

[Paragraph (g) amended by section 128 of Act 25 of 2015 effective on 1 April 2016]

(h)     water;

[Paragraph (h) added by section 128 of Act 25 of 2015 effective on 1 April 2016]

[Definition of “domestic goods and services” substituted by section 65 of Act 19 of 2001 and section 148 of Act 60 of 2001 and amended by section 92 of Act 32 of 2004]

“donated goods or services” means goods or services which are donated to an association not for gain and are intended for use in the carrying on or carrying out of the purposes of that association;

“donation” means a payment whether in money or otherwise voluntarily made to any association not for gain for the carrying on or the carrying out of the purposes of that association and in respect of which no identifiable direct valuable benefit arises or may arise in the form of a supply of goods or services to the person making that payment or in the form of a supply of goods or services to any other person who is a connected person in relation to the person making the payment, but does not include any payment made by a public authority or a municipality;

[Definition of “donation” inserted by section 92 of Act 32 of 2004 and substituted by section 40 of Act 9 of 2006]

“dwelling” means, except where it is used in the supply of commercial accommodation, any building, premises, structure, or any other place, or any part thereof, used predominantly as a place of residence or abode of any natural person or which is intended for use predominantly as a place of residence or abode of any natural person, including fixtures and fittings belonging thereto and enjoyed therewith;

[Definition of “dwelling” substituted by section 12 of Act 136 of 1992, section 65 of Act 19 of 2001 and section 148 of Act 60 of 2001]

“electronic services” means those electronic services prescribed by the Minister by regulation in terms of this Act;

[Definition of “electronic services” inserted by section 165 of Act 31 of 2013 effective on 1 April 2014]

“employee organization” means an organization in which a number of employees in any particular undertaking, industry, trade, occupation or profession are associated together for the purpose of regulating relations between themselves or some of them and their employers or some of their employers or mainly for that purpose, disregarding the provision of sickness, accident or unemployment benefits for the members of the organization or for the widows, children, dependants or nominees of deceased members;

[Definition of “employee organization” inserted by GN 2695 of 1991 and section 12 of Act 136 of 1992]

“enterprise” means-

(a)     in the case of any vendor, any enterprise or activity which is carried on continuously or regularly by any person in the Republic or partly in the Republic and in the course or furtherance of which goods or services are supplied to any other person for a consideration, whether or not for profit, including any enterprise or activity carried on in the form of a commercial, financial, industrial, mining, farming, fishing, municipal or professional concern or any other concern of a continuing nature or in the form of an association or club;

[Paragraph (a) substituted by section 40 of Act 9 of 2006]

(b)     without limiting the applicability of paragraph (a) in respect of any activity carried on in the form of a commercial, financial, industrial, mining, farming, fishing or professional concern-

(i)      the making of supplies by any public authority of goods or services which the Minister, having regard to the circumstances of the case, is satisfied are of the same kind or are similar to taxable supplies of goods or services which are or might be made by any person other than such public authority in the course or furtherance of any enterprise, if the Commissioner, in pursuance of a decision of the Minister under this subparagraph, has notified such public authority that its supplies of such goods or services are to be treated as supplies made in the course or furtherance of an enterprise;

(ii)     the activities of any welfare organization as respects activities referred to in the definition of “welfare organization” in this section;

(iii)    the activities of any share block company (other than the services in respect of which section 12 (f) applies) where such company has applied for registration as a vendor under the provisions of section 23 (3) and has been registered as such;

[Subparagraph (iii) added by section 12 of Act 136 of 1992]

(v)     the activities of an implementing agency carried on in the course of implementing, operating, administering or managing a foreign donor funded project;

[Subparagraph (v) added by section 101(b) of Act 31 of 2005 and substituted by section 66(1)(a) of Act 34 of 2019 effective on 1 April, 2020]

(vi)    the supply of electronic services by a person from a place in an export country, where at least two of the following circumstances are present:

(aa)   The recipient of those electronic services is a resident of the Republic;

(bb)   any payment to that person in respect of such electronic services originates from a bank registered or authorised in terms of the Banks Act, 1990 (Act 94 of 1990);

(cc)   the recipient of those electronic services has a business address, residential address or postal address in the Republic;

[Sub-paragraph (vi) added by section 165(1)(e) of Act 31 of 2013 and substituted by section 95(1)(a) of Act 43 of 2014 effective on 1 April, 2015. Item (cc) amended by section 8(1)(a) of Act 21 of 2018 effective on 1 April, 2019 and applicable in respect of supplies made on or after that date]

(vii)      the activities of an intermediary:

[Sub-paragraph (vii) added by section 8(1)(a) of Act 21 of 2018 effective on 1 April, 2019 and applicable in respect of supplies made on or after that date]

(c)     ……….

[Paragraph (c) amended by section 22 of Act 97 of 1993 and section 9 of Act 20 of 1994 and deleted by section 40 of Act 9 of 2006]

Provided that-

(i)      anything done in connection with the commencement or termination of any such enterprise or activity shall be deemed to be done in the course or furtherance of that enterprise or activity;

(ii)     any branch or main business of an enterprise permanently situated at premises outside the Republic shall be deemed to be carried on by a person separate from the vendor, if-

(aa)   the branch or main business can be separately identified; and

(bb)   an independent system of accounting is maintained by the concern in respect of the branch or main business;

[Paragraph (ii) substituted by section 22 of Act 97 of 1993, section 9 of Act 20 of 1994 and section 92 of Act 32 of 2004]

(iii)

(aa)   the rendering of services by an employee to his employer in the course of his employment or the rendering of services by the holder of any office in performing the duties of his office, shall not be deemed to be the carrying on of an enterprise to the extent that any amount constituting remuneration as contemplated in the definition of “remuneration” in paragraph 1 of the Fourth Schedule to the Income Tax Act is paid or is payable to such employee or office holder, as the case may be;

[Item (aa) substituted by section 164 of Act 45 of 2003]

(bb)   subparagraph (aa) of this paragraph shall not apply in relation to any employment or office accepted by any person in carrying on any enterprise carried on by him independently of the employer or concern by whom the amount of remuneration is paid or payable;

(iv)    any activity carried on by a natural person essentially as a private or recreational pursuit or hobby or any activity carried on by a person other than a natural person which would, if it were carried on by a natural person, be carried on essentially as a private or recreational pursuit or hobby shall not be deemed to be the carrying on of an enterprise;

(v)     any activity shall to the extent to which it involves the making of exempt supplies not be deemed to be the carrying on of an enterprise;

(vi)    the activity of underwriting insurance business by Underwriting Members of Lloyd’s of London, to the extent that contracts of insurance are concluded in the Republic, shall be deemed to be the carrying on of an enterprise;

[Paragraph (vi) added by GN 2695 of 1991 and section 12 of Act 136 of 1992 and substituted by section 81 of Act 53 of 1999]

(vii) ……….

[Paragraph (vii) added by section 9 of Act 20 of 1994, substituted by section 114 of Act 74 of 2002 and deleted by section 104 of Act 60 of 2008]

(viii)  the making of supplies by a constitutional institution listed in Schedule 1 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), shall be deemed not to be the carrying on of an enterprise;

[Paragraph (viii) inserted by section 164 of Act 45 of 2003]

(ix)    where a person carries on or intends carrying on an enterprise or activity supplying commercial accommodation as contemplated in paragraph (a) of the definition of “commercial accommodation” in section 1, and the total value of taxable supplies made by that person in respect of that enterprise or activity in the preceding period of 12 months or which it can reasonably be expected that that person will make in a period of 12 months, as the case may be, will not exceed R120 000, shall be deemed not to be the carrying on of that enterprise;

[Paragraph (ix) added by section 92 of Act 32 of 2004 and substituted by section 128 of Act 25 of 2015 and section 83 of Act 15 of 2016 effective on 1 April 2017]

(x)     where the Minister is satisfied that an activity of the municipal entity as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000), is of a regulatory nature and if the Commissioner, in pursuance of a decision of the Minister, has notified that ‘municipal entity’ of that decision, the supply of goods or services in respect of that activity by the municipal entity shall be deemed not to be the carrying on of an enterprise;

[Paragraph (x) inserted by section 40 of Act 9 of 2006]

(xi)    the supply of services by a mutual association licensed in terms of section 30 of the Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993), to carry on the business of insurance of employers against their liabilities to employees in terms of that Act in respect of which that mutual association pays compensation that is no greater than compensation that would have been paid in similar circumstances in terms of that Act shall be deemed not to be the carrying on of an enterprise;

[Paragraph (xi) inserted by section 129 of Act 24 of 2011 with effect from 10 January 2012]

(xii)    any activity carried on by a trust contemplated in the definition of “sukuk” in section 24JA (1) of the Income Tax Act shall be deemed not to be the carrying on of an enterprise;

[Paragraph (xii) inserted by section 129 of Act 24 of 2011 effective on from 1 January 2013]

(xiii)   where a person is neither a resident of the Republic, nor a registered vendor and that person supplies or intends to supply to a recipient solely the use or the right of use of ships, aircraft, rolling stock or parts directly in connection thereto under any rental agreement, that activity shall be deemed not to be the carrying on of an enterprise, notwithstanding that those goods are supplied for use in the Republic, if-

(aa)   the supply is made to a recipient that is a resident of the Republic;

(bb)   such goods are supplied for use by the recipient wholly or partly in the Republic; and

(cc)   the recipient and supplier have agreed in writing that the recipient shall—

(A)    in terms of the Customs and Excise Act, enter such goods for home consumption and be liable for the payment of the tax imposed in accordance with section 7(1)(b) and section 13 of this Act; and

(B)    not be reimbursed by the supplier of the movable goods in respect of the tax imposed under section 7(1)(b) of this Act;

[Paragraph (xiii) added by section 61(1) of Act 23 of 2020 and amended by section 27(1)(a) of Act 20 of 2022 effective on 1 January, 2023]

(xiv)  where goods are supplied by a “qualifying purchaser” to another “qualifying purchaser” on a “flash title” basis as respectively defined in the regulations issued in terms of section 74(1)(contained in Government Notice No. R.316 published in Government Gazette No. 37580 of 2 May 2014) read with paragraph (d) of the definition of “exported” in section 1(1), the activity of the first-mentioned qualifying purchaser shall be deemed not to be the carrying on of an enterprise in the Republic provided that the documentary requirements prescribed in regulation 10 of the regulation referred to in paragraph (d) of the definition of “exported” in section 1(1) are complied with: Provided further that the provisions of this paragraph shall not apply where the first-mentioned qualifying purchaser applies in writing to the Commissioner and the Commissioner, having regard to the circumstances of the case, directs that the provisions of this section shall not apply to such first-mentioned qualifying purchaser;

[Paragraph (xiv) added by section 27(1)(b) of Act 20 of 2022 effective on 1 January, 2023]

(xv)   the activities of the Corporation for Deposit Insurance established in terms of section 166AE of the Financial Sector Regulation Act, 2017 (Act 9 of 2017), shall to the extent that it makes supplies of deposit insurance as contemplated in section 166AF(1) of that Act be deemed not to be the carrying on of an enterprise;

[Paragraph (xv) added by section 46(1) of Act 17 of 2023 effective on 1 April, 2024]

“entertainment” means the provision of any food, beverages, accommodation, entertainment, amusement, recreation or hospitality of any kind by a vendor whether directly or indirectly to anyone in connection with an enterprise carried on by him;

“exempt supply” means a supply that is exempt from tax under section 12;

“export country” means any country other than the Republic and includes any place which is not situated in the Republic: Provided that the President may by notice in the Gazette determine that a specific country or territory shall from a date and to the extent indicated in the notice, be deemed not to be an export country;

[Definition of “export country” substituted by section 12 of Act 136 of 1992 and section 9 of Act 20 of 1994]

“exported”, in relation to any movable goods supplied by any vendor under a sale or an instalment credit agreement, means-

(a)     consigned or delivered by the vendor to the recipient at an address in an export country as evidenced by documentary proof acceptable to the Commissioner; or

(b)     delivered by the vendor to the owner or charterer of any foreign-going ship contemplated in paragraph (a) or (c) of the definition of “foreign-going ship” or to a foreign-going aircraft when such ship or aircraft is going to a destination in an export country and such goods are for use or consumption in such ship or aircraft, as the case may be; or

[Paragraph (b) substituted by section 119 of Act 7 of 2010 effective on 2 November 2010]

(c)     delivered by the vendor to the owner or charterer of any foreign-going ship contemplated in paragraph (b) of the definition of “foreign-going ship” for use in such ship; or

(d)     removed from the Republic by the recipient or recipient’s agent for conveyance to an export country in accordance with any regulation made by the Minister in terms of this Act;

[Paragraph (d) amended by section 22 of Act 97 of 1993 and substituted by section 9 of Act 20 of 1994 and section 165 of Act 31 of 2013 effective on 1 April 2014]

“financial services” means the activities which are deemed by section 2 to be financial services;

“fixed property” means land (together with improvements affixed thereto), any unit as defined in section 1 of the Sectional Titles Act, 1986 (Act No. 95 of 1986), any share in a share block company which confers a right to or an interest in the use of immovable property, and, in relation to a property time-sharing scheme, any time-sharing interest as defined in section 1 of the Property Time-sharing Control Act, 1983 (Act No. 75 of 1983); and any real right in any such land, unit, share or time-sharing interest;

[Definition of “fixed property” substituted by GN 2695 of 1991 and section 12 of Act 136 of 1992]

“foreign donor funded project” means a project established in terms of an official development assistance agreement to supply goods or services to beneficiaries, to which the government of the Republic is a party, and which-

(a)     is binding on the Republic in terms of section 231(3) of the Constitution of the Republic of South Africa, 1996;

(b)     provides that the international donor funding must not be subject to tax; and

(c)     has been approved by the Minister of Finance as a foreign donor funded project for the purposes of the definition;

[Definition of “foreign donor funded project” inserted by section 101(c) of Act 31 of 2005 and substituted by section 77(c) of Act 20 of 2006 and by section 66(1)(b) of Act 34 of 2019 effective on 1 April, 2020]

“foreign-going aircraft” means any –

(a)     aircraft engaged in the transportation for reward of passengers or goods wholly or mainly on flights between airports in the Republic and airports in export countries or between airports in export countries; or

(b)     foreign military aircraft;

[Definition of “foreign-going aircraft” substituted by section 9 of Act 20 of 1994 and section 119 of Act 7 of 2010 effective on 2 November 2010]

“foreign-going ship” means-

(a)     any ship or other vessel engaged in the transportation for reward of passengers or goods wholly or mainly on voyages between ports in the Republic and ports in export countries or between ports in export countries;

[Paragraph (a) amended by section 119 of Act 7 of 2010 effective on 2 November 2010]

(b)     any ship or other vessel registered in an export country where such ship or vessel is utilized for the purposes of a commercial, fishing or other concern conducted outside the Republic by a person who is not a vendor and is not a resident of the Republic; or

[Paragraph (b) amended by section 119 of Act 7 of 2010 effective on 2 November 2010]

(c)     any foreign naval ship;

[Paragraph (c) inserted by section 119 of Act 7 of 2010 effective on 2 November 2010]

[Definition of “foreign-going ship” substituted by section 9 of Act 20 of 1994]

“goods” means corporeal movable things, fixed property, any real right in any such thing or fixed property, and electricity, but excluding-

[Words preceding paragraph (a) substituted by section 104 of Act 60 of 2008]

(a)     money;

(b)     any right under a mortgage bond or pledge of any such thing or fixed property; and

(c)     any stamp, form or card which has a money value and has been sold or issued by the State for the payment of any tax or duty levied under any Act of Parliament, except when subsequent to its original sale or issue it is disposed of or imported as a collector’s piece or investment article;

“grant” means any appropriation, grant in aid, subsidy or contribution transferred, granted or paid to a vendor by a public authority, municipality or constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), but does not include-

(a)     a payment made for the supply of any goods or services to that public authority or municipality, including all goods or services supplied to a public authority, municipality or constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999) in accordance with a procurement process prescribed-

(i)    in terms of the Regulations issued under section 76(4)(c) of the Public Finance Management Act, 1999 (Act No. 1 of 1999); or

(ii)   in terms of Chapter 11 of the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003), or any other similar process; or

(b)     a payment contemplated in section 8(23);

[Paragraph (b) substituted by section 128 of Act 25 of 2015 and section 77 of Act 17 of 2017 effective on 1 April 2017]

[Definition of “grant” inserted by section 92 of Act 32 of 2004 and substituted by section 40 of Act 9 of 2006]

“implementing agency” means-

(a)     the government of the Republic in the national, provincial or local sphere; or

(b)     any institution or body established and appointed by a foreign government, as contemplated in section 10(1)(bA)(ii) of the Income Tax Act; or

(c)     any person who has entered into a contract directly with the party contemplated in paragraph (a) or (b),

to implement, operate, administer or manage a foreign donor funded project;

[Definition of “implementing agency” inserted by section 66(1)(c) of Act 34 of 2019 effective on 1 April, 2020]

“imported services” means a supply of services that is made by a supplier who is resident or carries on business outside the Republic to a recipient who is a resident of the Republic to the extent that such services are utilized or consumed in the Republic otherwise than for the purpose of making taxable supplies;

“inbound duty and tax free shop” means an inbound duty and tax free shop as contemplated in the Customs and Excise Act;

[Definition of “inbound duty and tax free shop” inserted by section 104 of Act 60 of 2008]

“Income Tax Act” means the Income Tax Act, 1962 (Act No. 58 of 1962);

“input tax”, in relation to a vendor, means-

(a)     tax charged under section 7 and payable in terms of that section by-

(i)     a supplier on the supply of goods or services made by that supplier to the vendor; or

(ii)   the vendor on the importation of goods by that vendor; or

[Subparagraph (ii) substituted by section 19 of Act 44 of 2014 effective on 20 January 2015]

(iii)  the vendor under the provisions of section 7(3);

(b)     an amount equal to the tax fraction (being the tax fraction applicable at the time the supply is deemed to have taken place) of the lesser of any consideration in money given by the vendor for or the open market value of the supply (not being a taxable supply) to him by way of a sale on or after the commencement date by a resident of the Republic (other than a person or diplomatic or consular mission of a foreign country established in the Republic that was granted relief, by way of a refund of tax as contemplated in section 68) of any second-hand goods situated in the Republic;

[Paragraph (b) substituted by GN 2695 of 1991 and section 12 of Act 136 of 1992, amended by section 22 of Act 97 of 1993, substituted by section 9 of Act 20 of 1994 and amended by section 23 of Act 27 of 1997 and section 104 of Act 35 of 2007]

[Proviso to paragraph (b) deleted by section 129 of Act 24 of 2011 with effect from 10 January 2012]

(c)     an amount equal to the tax fraction of the consideration in money deemed by section 10(16) to be for the supply (not being a taxable supply) by a debtor to the vendor of goods repossessed under an instalment credit agreement or a surrender of goods: Provided that the tax fraction applicable under this paragraph shall be the tax fraction applicable at the time of supply of the goods to the debtor under such agreement as contemplated in section 9(3)(c),

[Words preceding the proviso substituted by section 165 of Act 31 of 2013 effective on 1 April 2014]

where the goods or services concerned are acquired by the vendor wholly for the purpose of consumption, use or supply in the course of making taxable supplies or, where the goods or services are acquired by the vendor partly for such purpose, to the extent (as determined in accordance with the provisions of section 17) that the goods or services concerned are acquired by the vendor for such purpose;

“instalment credit agreement” means any agreement entered into on or after the commencement date whereby any goods consisting of corporeal movable goods or of any machinery or plant, whether movable or immovable-

(a)     are supplied under a sale under which-

(i)      the goods are sold by the seller to the purchaser against payment by the purchaser to the seller of a stated or determinable sum of money at a stated or determinable future date or in whole or in part in instalments over a period in the future; and

(ii)     such sum of money includes finance charges, including any amount determined with reference to the time value of money, stipulated in the lease; and

[Subparagraph (ii) substituted by section 145 of Act 22 of 2012 effective on 1 January 2013]

(iii)  the aggregate of the amounts payable by the purchaser to the seller under such agreement exceeds the cash value of the supply; and

(iv)

(aa)   the purchaser does not become the owner of those goods merely by virtue of the delivery to or the use, possession or enjoyment by him thereof; or

(bb)   the seller is entitled to the return of those goods if the purchaser fails to comply with any term of that agreement; or

(b)     are supplied under a lease under which-

(i)      the rent consists of a stated or determinable sum of money payable at a stated or determinable future date or periodically in whole or in part in instalments over a period in the future; and

(ii)   such sum of money includes finance charges stipulated in the lease; and

(iii)    the aggregate of the amounts payable under such lease by the lessee to the lessor for the period of such lease (disregarding the right of any party thereto to terminate the lease before the end of such period) and any residual value of the leased goods on termination of the lease, as stipulated in the lease, exceeds the cash value of the supply; and

(iv)    the lessee is entitled to the possession, use or enjoyment of those goods for a period of at least 12 months; and

(v)

(aa)   the lessee accepts the full risk of destruction or loss of, or other disadvantage to, those goods and assumes all obligations of whatever nature arising in connection with the insurance, maintenance and repair of those goods while the agreement remains in force; or

(bb)

(A)    the lessor accepts the full risk of destruction or loss of, or other disadvantage to those goods and assumes all obligations of whatever nature arising in connection with the insurance of those goods; and

(B)    the lessee accepts the full risk of maintenance and repair of those goods and reimburses the lessor for the insurance of those goods,

while the agreement remains in force;

[Paragraph (b) substituted by section 145 of Act 22 of 2012 effective on 1 January 2013]

“insurance” means insurance or guarantee against loss, damage, injury or risk of any kind whatever, whether pursuant to any contract or law, and includes reinsurance; and “contract of insurance” includes a policy of insurance, an insurance cover, and a renewal of a contract of insurance: Provided that nothing in this definition shall apply to any insurance specified in section 2;

“intermediary” means a person who facilitates the supply of electronic services supplied by the electronic services supplier and who is responsible for issuing the invoices and collecting payment for the supply;

[Definition of “intermediary” inserted by section 8(1)(b) of Act 21 of 2018 effective on 1 April, 2019 and applicable in respect of supplies made on or after that date]

“invoice” means a document notifying an obligation to make payment;

“licensed customs and excise storage warehouse” means a ware­house licensed by the Commissioner at any place appointed for that purpose under the provisions of the Customs and Excise Act, which has been approved by the Commissioner for the storage of goods as he may approve in respect of that warehouse;

[Definition of “licensed customs and excise storage warehouse” inserted by section 101 of Act 31 of 2005]

“Minister” means the Minister of Finance;

“money” means-

(a)     coins (other than coins made wholly or mainly from a precious metal other than silver) which the South African Reserve Bank has issued in the Republic in accordance with the provisions of section 14 of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989), or which remain in circulation as contemplated in the proviso to subsection (1) of that section, and any paper currency which under the said Act is a legal tender;

(b)

(i)      any coin (other than a coin made wholly or mainly from a precious metal) or paper currency of any country other than the Republic which is used or circulated or is intended for use or circulation as currency;

(ii)   any bill of exchange, promissory note, bank draft, postal order or money order,

except when disposed of or imported as a collector’s piece, investment article or item of numismatic interest;

“month” means any of the twelve portions into which any calendar year is divided;

[Definition of “month” inserted by section 164 of Act 45 of 2003]

“motor car” includes a motor car, station wagon, minibus, double cab light delivery vehicle and any other motor vehicle of a kind normally used on public roads, which has three or more wheels and is constructed or converted wholly or mainly for the carriage of passengers, but does not include-

(a)     vehicles capable of accommodating only one person or suitable for carrying more than 16 persons, or

(b)     vehicles of an unladen mass of 3 500 kilograms or more; or

(c)     caravans and ambulances;

(d)     vehicles constructed for a special purpose other than the carriage of persons and having no accommodation for carrying persons other than such as is incidental to that purpose;

(e)     game viewing vehicles (other than sedans, station wagons, mini-buses or double cab light delivery vehicles) constructed or permanently converted for the carriage of seven or more passengers for game viewing in national parks, game reserves, sanctuaries or safari areas and used exclusively for that purpose, other than use which is merely incidental and subordinate to that use; or

(f)     vehicles, constructed as or permanently converted into hearses for the transport of deceased persons and used exclusively for that purpose;

[Definition of “motor car” amended by section 76 of Act 30 of 2000 and section 92 of Act 32 of 2004]

“municipality” means a municipality as defined in section 1 of the Income Tax Act;

[Definition of “municipality” inserted by section 40 of Act 9 of 2006 and substituted by section 77 of Act 20 of 2006 and section 81 of Act 8 of 2007]

“municipal rate” means a rate levied by a municipality in terms of section 2 of the Local Government: Municipal Property Rates Act, 2004 (Act No. 6 of 2004), on ‘rateable property’ of an ‘owner’ as defined in section 1 of that Act respectively: Provided that a municipal rate does not include-

(a)     a single charge levied by that municipality for rates and other supplies of goods or services such as-

(i)      electricity, gas, water; or

(ii)   drainage, removal or disposal of sewage or garbage; or

(iii)  goods or services that are incidental to, or necessary for the supply of those goods or services, to that owner; or

(b)     a rate levied in respect of supplies of goods or services contemplated in paragraph (a);

[Definition of “municipal rate” inserted by section 40 of Act 9 of 2006]

“open market value” in relation to the supply of goods or services, means the open market value thereof determined in accordance with the provisions of section 3;

“output tax”, in relation to any vendor, means the tax charged under section 7(1)(a) in respect of the supply of goods and services by that vendor;

“person” includes any public authority, any municipality, any company, any body of persons (corporate or unincorporated), the estate of any deceased or insolvent person and any trust fund;

[Definition of “person” substituted by section 101(e) of Act 31 of 2005, by section 40(1)(k) of Act 9 of 2006 and by section 66(1)(d) of Act 34 of 2019 effective on 1 April, 2020]

“precious metals” means gold, silver, platinum, iridium and any other metals of the platinum group, and any other metal which the State President has by proclamation in the Gazette declared to be a precious metal for the purpose of this Act;

“prescribed rate” in relation to any interest payable in terms of this Act means a rate equal to the rate fixed from time to time by the Minister by notice in the Gazette in terms of section 80(1)(b) of the Public Finance Management Act, 1999 (Act No. 1 of 1999): Provided that where the Minister fixes a new rate in terms of that Act, that new rate applies for purposes of this Act from the first day of the second month following the date on which that new rate came into operation;

[Definition of “prescribed rate” inserted by section 1 of Act 61 of 1993, amended by section 9 of Act 20 of 1994, GN 1505 of 1998, GN 541 of 1999, GN 1065 of 1999, GN 184 of 2000 and GN 1160 of 2002 and substituted by section 114 of Act 74 of 2002 and section 43 of Act 16 of 2004]

[Definition of “prescribed rate” to be substituted by section 271 of Act 28 of 2011 with effect from a date determined by the President by proclamation in the Gazette]

“public authority” means-

(i)      any department or division of the public service as listed Schedules 1, 2 or 3 of the Public Service Act, 1994 (Act No. 103 of 1994); or

(ii)    any public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999); or

(iii)   any other public entity designated by the Minister for the purposes of this Act to be a public authority;

[Definition of “public authority” substituted by section 148 of Act 60 of 2001 and section 92 of Act 32 of 2004]

“recipient”, in relation to any supply of goods or services, means the person to whom the supply is made

“rental agreement” means-

(a)     any agreement entered into before, on or after the commencement date for the letting of goods, other than a lease referred to in paragraph (b) of the definition of “instalment credit agreement” in this section or a financial lease as defined in the Sales Tax Act, 1978 (Act No. 103 of 1978), prior to its repeal; and

(b)     any rental agreement, as defined in the said Act where such agreement is in force on or after the commencement date;

“Republic”, in the geographical sense, means the territory of the Republic of South Africa and includes the territorial waters, the contiguous zone and the continental shelf referred to respectively in sections 4, 5 and 8 of the Maritime Zones Act, 1994 (Act No. 15 of 1994);

[Definition of “Republic” substituted by section 18 of Act 37 of 1996]

“resident of the Republic” means a resident as defined in section 1 of the Income Tax Act: Provided that any other person or any other company shall be deemed to be a resident of the Republic to the extent that such person or company carries on in the Republic any enterprise or other activity and has a fixed or permanent place in the Republic relating to such enterprise or other activity;

[Definition of “resident of the Republic” amended by section 64 of Act 59 of 2000]

“returnable container” means any container belonging to a class of containers in relation to which, at the time of delivery of the contents thereof, ownership of that container is not transferred to the recipient of the contents and a specifically identified amount is usually charged as a deposit by the supplier of the contents upon the express undertaking of the supplier that upon the return of that container such deposit will be refunded or allowed as a credit to such recipient or any other person returning such container;

“sale” means an agreement of purchase and sale and includes any transaction or act whereby or in consequence of which ownership of goods passes or is to pass from one person to another;

“second-hand goods” means-

(a)     goods which were previously owned and used; or

(b)     in respect of the transfer of a unit in the circumstances referred to in Item 8 of Schedule 1 to the Share Blocks Control Act, such unit,

but does not include-

(i)      animals;

(ii)

(aa)   goods consisting solely of gold unless acquired for the sole purpose of supplying such goods in the same state without any further processing;

(bb)   gold coins contemplated in section 11(1)(k); or

(cc)   any other goods containing gold unless those goods are acquired for the sole purpose of supplying those goods in the same or substantially the same state to another person;

[Subparagraph (ii) amended by section 104 of Act 60 of 2008 and substituted by section 95 of Act 43 of 2014 and section 83 of Act 15 of 2016 effective on 1 April 2017]

(iii)    any prospecting right, mining right, exploration right, production right, mining permit, retention permit or reconnaissance permit as defined in section 1 of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002), or any reconnaissance permission contemplated in section 14 of that Act granted or renewed in terms of that Act or received upon conversion pursuant to Schedule II, except when that prospecting right, mining right, exploration right, production right or interest in that right is transferred, ceded, let, sublet, alienated, varied or otherwise disposed of as contemplated in section 11 of the Mineral and Petroleum Resources Development Act, 2002;

[Paragraph (iii) added by section 164 of Act 45 of 2003 and substituted by section 43 of Act 16 of 2004]

[Definition of “second-hand goods” substituted by GN 2695 of 1991, section 12 of Act 136 of 1992 and section 9 of Act 20 of 1994 and amended by section 164 of Act 45 of 2003]

“services” means anything done or to be done, including the granting, assignment, cession or surrender of any right or the making available of any facility or advantage, but excluding a supply of goods, money or any stamp, form or card contemplated in paragraph (c) of the definition of “goods”;

[Definition of “services” substituted by section 12 of Act 136 of 1992]

“SEZ operator” means an operator defined in section 1 of the Special Economic Zones Act;

[Definition of “SEZ operator” inserted by section 23 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014, (Act No. 16 of 2014) is operational, 9 February 2016]

“Special Economic Zone” or “SEZ” has the meaning assigned thereto in section 21A(1) of the Customs and Excise Act;

[Definition of “Special Economic Zone” or “SEZ” inserted by section 23 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act2014, (Act No. 16 of 2014) is operational, 9 February 2016]

“share block company” means a share block company as defined in section 1 of the Share Blocks Control Act;

[Definition of “share block company” inserted by section 12 of Act 136 of 1992 and substituted by section 9 of Act 20 of 1994]

“Share Blocks Control Act” means the Share Blocks Control Act, 1980 (Act No. 59 of 1980);

[Definition of “Share Blocks Control Act” inserted by section 9 of Act 20 of 1994]

“shareholder”–

(a)     in relation to any company referred to in paragraph (a), (b) or (d) of the definition of ‘company” in section 1(1) of the Income Tax Act, means the registered shareholder in respect of any share, except that where some person other than the registered shareholder is entitled, whether by virtue of any provision in the memorandum or articles of association of the company or under the terms of any agreement or contract, or otherwise, to all or part of the benefit of the rights of participation in the profits, income or capital attaching to the share so registered, that other person shall, to the extent that such person is entitled to such benefit, also be deemed to be a shareholder; or

(b)     in relation to any close corporation, means a member of such corporation; or

(c)     in relation to any co-operative, means a member of such co-operative;

[Definition of “shareholder” inserted by section 128 of Act 25 of 2015 effective on 1 April 2012 – Date of operation in section 128 of Act 25 of 2015 as amended by section 106 of Act 15 of 2016]

“South African Revenue Service” means the South African Revenue Service established by section 2 of the South African Revenue Service Act, 1997;

[Definition of “South African Revenue Service” inserted by section 34 of Act 34 of 1997]

“Special Economic Zones Act” means the Special Economic Zones Act, 2014 (Act No. 16 of 2014);

[Definition of “Special Economic Zones Act” inserted by section 19 of Act 44 of 2014 effective on the date on which the Special Economic Zones Act is operational, 9 February 2016 – Date of operation in section 19 of Act 44 of 2014 as amended by section 82 of Act 16 of 2016]

“Stamp Duties Act” means the Stamp Duties Act, 1968 (Act No. 77 of 1968);

[Definition of “Stamp Duties Act” inserted by section 9 of Act 20 of 1994]

“supplier”, in relation to any supply of goods or services, means the person supplying the goods or services;

“supply” includes performance in terms of a sale, rental agreement, instalment credit agreement and all other forms of supply, whether voluntary, compulsory or by operation of law, irrespective of where the supply is effected, and any derivative of “supply” shall be construed accordingly;

[Definition of “supply” substituted by section 81 of Act 53 of 1999]

1. Definitions

(1)        In this Act, unless the context otherwise indicates-

“adjusted cost”, means the cost of any goods or services where tax has been charged or would have been charged if section 7 of this Act had been applicable prior to the commencement date, in respect of the supply of goods and services or if the vendor was or would have been entitled to an input tax deduction in terms of paragraph (b) of the definition of “input tax”;

[Definition of “adjusted cost” inserted by section 164 of Act 45 of 2003]

“ancillary transport services” means stevedoring services, lashing and securing services, cargo inspection services, preparation of customs documentation, container handling services and storage of transported goods or goods to be transported;

“association not for gain” means-

(a)     any religious institution of a public character; or

(b)     any other society, association or organization, whether incorporated or not (other than an educational institution in respect of which the provisions of paragraph (c) apply), which-

(i)    is carried on otherwise than for the purposes of profit or gain to any proprietor, member or shareholder; and

(ii)   is, in terms of its memorandum, articles of association, written rules or other document constituting or governing the activities of that society, association or organization-

(aa)   required to utilize any property or income solely in the furtherance of its aims and objects; and

(bb)   prohibited from transferring any portion thereof directly or indirectly in any manner whatsoever so as to profit any person other than by way of the payment in good faith of reasonable remuneration to any officer or employee of the society, association or organization for any services actually rendered to such society, association or organization; and

(cc)   upon the winding-up or liquidation of such society, association or organization, obliged to give or transfer its assets remaining after the satisfaction of its liabilities to some other society, association or organization with objects similar to those of the said society, association or organization; or

[Paragraph (b) substituted by section 23 of Act 27 of 1997]

(c)     any educational institution of a public character, whether incorporated or not, which-

(i)      is carried on otherwise than for the purposes of profit or gain to any proprietor, member or shareholder; and

(ii)     is, in terms of its memorandum, articles of association, written rules or other document constituting or governing the activities of that educational institution-

(aa)   required to utilize any property or income solely in the furtherance of its aims and objects; and

(bb)   prohibited from transferring any portion thereof directly or indirectly in any manner whatsoever so as to profit any person other than by way of the payment in good faith of reasonable remuneration to any officer or employee of the educational institution for any services actually rendered to such institution;

[Paragraph (c) added by section 23 of Act 27 of 1997]

“cash value”, in relation to the supply of goods supplied under an instalment credit agreement or by a surrender of goods as defined in this section, means-

[Words preceding paragraph (a) substituted by section 165 of Act 31 of 2013 effective on 1 April 2014]

(a)     where the seller or lessor is a banker or financier, an amount equal to or exceeding the sum of the cost to the banker or financier of the goods, including any cost of erection, construction, assembly or installation of the goods borne by the banker or financier and the tax leviable under section 7(1)(a) in respect of such supply by the banker or financier; or

(b)     where the seller or lessor is a dealer, an amount equal to or exceeding the price (including tax) at which the goods are normally sold by him for cash or may normally be acquired from him for cash (including tax) and any charge (including tax) made by the seller or lessor in respect of the erection, construction, assembly or installation of the goods if such charge is financed by the seller or lessor under the instalment credit agreement;

“close corporation” means a close corporation within the meaning of the Close Corporations Act, 1984 (Act No. 69 of 1984);

“commencement date” means 30 September, 1991;

[Definition of “commencement date” substituted by section 21 of Act 136 of 1991]

“commercial accommodation” means-

(a)     lodging or board and lodging, together with domestic goods and services, in any house, flat, apartment, room, hotel, motel, inn, guest house, boarding house, residential establishment, holiday accommodation unit, chalet, tent, caravan, camping site, houseboat, or similar establishment, which is regularly or systematically supplied but excluding a dwelling supplied in terms of an agreement for the letting and hiring thereof;

[Paragraph (a) substituted by section 47 of Act 12 of 2003, section 81 of Act 8 of 2007, section 68 of Act 3 of 2008 and section 128 of Act 25 of 2015 effective on 1 April 2016]

(b)     lodging or board and lodging in a home for the aged, children, physically or mentally handicapped persons; and

(c)     lodging or board and lodging in a hospice;

[Definition of “commercial accommodation” inserted by section 65 of Act 19 of 2001 and substituted by section 148 of Act 60 of 2001]

“Commissioner” means the Commissioner for the South African Revenue Service appointed in terms of section 6 of the South African Revenue Service Act, 1997 (Act No. 34 of 1997), or the Acting Commissioner designated in terms of section 7 of that Act;

[Definition of “Commissioner” substituted by section 34 of Act 34 of 1997 and section 271 of Act 28 of 2011 effective on 1 October 2012]

“company” means a company as defined in section 1 of the Income Tax Act;

“connected persons” means-

(a)     any natural person (including the estate of a natural person if such person is deceased or insolvent) and-

(i)      any relative of that natural person (being a relative as defined in section 1 of the Income Tax Act) or the estate of any such relative if the relative is deceased or insolvent; or

(ii)   any trust fund in respect of which any such relative or such estate of such relative is or may be a beneficiary; or

[Paragraph (a) substituted by section 22 of Act 97 of 1993]

(b)     any trust fund and any person who is or may be a beneficiary in respect of that fund; or

(c)     any partnership or close corporation and-

(i)      any member thereof; or

(ii)   any other person where that person and a member of such partnership or close corporation, as the case may be, are connected persons in terms of this definition; or

(d)     any company (other than a close corporation) and-

(i)      any person (other than a company) where that person, his spouse or minor child or any trust fund in respect of which that person, his spouse or minor child is or may be a beneficiary, is separately interested or two or more of them are in the aggregate interested in 10 per cent or more of the company’s paid-up capital or 10 per cent or more of the company’s equity shares (as defined in section 1 of the Income Tax Act) or 10 per cent or more of the voting rights of the shareholders of the company, whether directly or indirectly; or

[Subparagraph (i) substituted by section 165 of Act 31 of 2013 effective on 1 April 2012]

(ii)     any other company the shareholders in which are substantially the same persons as the shareholders in the first-mentioned company, or which is controlled by the same persons who control the first-mentioned company; or

[Subparagraph (ii) substituted by section 128 of Act 25 of 2015 effective on 1 April 2012 – Date of operation as in section 128 of Act 25 of 2015 as amended by section 106 of Act 15 of 2015]

(iii)    any person where that person and the person referred to in subparagraph (i) or his spouse or minor child or the trust fund referred to in that subparagraph or the other company referred to in subparagraph (ii) are connected persons in terms of this definition; or

(e)     any separate enterprise, branch or division of a vendor which is separately registered as a vendor under the provisions of section 50 and any other such enterprise, branch or division of the vendor; or

(f)     any branch, division or separate enterprise of an association not for gain which is deemed by subsection (5) of section 23 to be a separate person for the purposes of that section and any other branch, division or separate enterprise of that association, whether or not such other branch, division or separate enterprise is a vendor; or

[Paragraph (f) amended by section 23 of Act 27 of 1997]

(g)     any person and any superannuation scheme referred to in section 2(2)(vii), the members of which are mainly the employees or office holders or former employees or office holders of that person;

[Paragraph (g) added by section 23 of Act 27 of 1997]

“consideration”, in relation to the supply of goods or services to any person, includes any payment made or to be made (including any deposit on any returnable container and tax), whether in money or otherwise, or any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of any goods or services, whether by that person or by any other person, but does not include any payment made by any person as a donation to any association not for gain: Provided that a deposit (other than a deposit on a returnable container), whether refundable or not, given in respect of a supply of goods or services shall not be considered as payment made for the supply unless and until the supplier applies the deposit as consideration for the supply or such deposit is forfeited;

[Definition of “consideration” substituted by section 92 of Act 32 of 2004 and amended by section 8 of Act 10 of 2005 with effect from 24 January 2005]

“consideration in money” includes consideration expressed as an amount of money;

“Controller” has the meaning assigned thereto in section 1 of the Customs and Excise Act;

[Definition of “Controller” inserted by section 101 of Act 31 of 2005]

“Customs and Excise Act” means the Customs and Excise Act, 1964 (Act No. 91 of 1964);

“customs controlled area” has the meaning assigned thereto in section 21A(1) of the Customs and Excise Act;

[Definition of “customs controlled area” inserted by section 164 of Act 45 of 2003 and substituted by section 165 of Act 31 of 2013 and section 23 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

“customs controlled area enterprise” has the meaning assigned thereto in section 21A(1) of the Customs and Excise Act;

[Definition of “customs controlled area enterprise” inserted by section 164 of Act 45 of 2003 and substituted by section 165 of Act 31 of 2013 and section 23 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

“designated entity” means a vendor-

(i)      to the extent that its supplies of goods and services of an activity carried on by that vendor are in terms of (b)(i) of the definition of ‘enterprise’ treated as supplies made in the course or furtherance of an enterprise;

(ii)    which is a major public entity, national government business enterprise or provincial government business enterprise listed in Schedule 2 or Part B or D of Schedule 3 of the Public Finance Management Act, 1999 (Act No. l of 1999), respectively;

[Paragraph (ii) amended by section 40 of Act 9 of 2006]

(iii)   which is a  party to a ‘Public Private Partnership Agreement’ as defined in Regulation 16 of the Treasury Regulations issued in terms of section 76 of the Public Finance Management  Act, 1999 (Act No. 1 of 1999), to the extent that that party supplies goods or services in terms of that Agreement to the ‘institution’ defined in that Regulation;

[Paragraph (iii) substituted by section 104 of Act 60 of 2008 and section 26 of Act 8 of 2010 effective on 2 November 2010]

(iv)    which is a welfare organisation;

[Paragraph (iv) amended by section 40 of Act 9 of 2006 and section 77 of Act 20 of 2006]

(v)     which is a municipal entity as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000); or

[Paragraph (v) added by section 40 of Act 9 of 2006 and amended by section 77 of Act 20 of 2006]

(vi)    which has powers similar to those of any water board listed in Part B of Schedule 3 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), which would have complied with the definition of ‘local authority’ in section 1 prior to the deletion of that definition on 1 July 2006;

[Paragraph (vi) inserted by section 77 of Act 20 of 2006]

[Definition of “designated entity” inserted by section 164 of Act 45 of 2003]

“domestic goods and services” means goods and services provided in any enterprise supplying commercial accommodation, including-

(a)     cleaning and maintenance;

(b)     electricity, gas, air conditioning or heating;

(c)     a telephone, television set, radio or other similar article;

(d)     furniture and other fittings;

(e)     meals;

(f)     laundry;

[Paragraph (f) amended by section 128 of Act 25 of 2015 effective on 1 April 2016]

(g)     nursing services; or

[Paragraph (g) amended by section 128 of Act 25 of 2015 effective on 1 April 2016]

(h)     water;

[Paragraph (h) added by section 128 of Act 25 of 2015 effective on 1 April 2016]

[Definition of “domestic goods and services” substituted by section 65 of Act 19 of 2001 and section 148 of Act 60 of 2001 and amended by section 92 of Act 32 of 2004]

“donated goods or services” means goods or services which are donated to an association not for gain and are intended for use in the carrying on or carrying out of the purposes of that association;

“donation” means a payment whether in money or otherwise voluntarily made to any association not for gain for the carrying on or the carrying out of the purposes of that association and in respect of which no identifiable direct valuable benefit arises or may arise in the form of a supply of goods or services to the person making that payment or in the form of a supply of goods or services to any other person who is a connected person in relation to the person making the payment, but does not include any payment made by a public authority or a municipality;

[Definition of “donation” inserted by section 92 of Act 32 of 2004 and substituted by section 40 of Act 9 of 2006]

“dwelling” means, except where it is used in the supply of commercial accommodation, any building, premises, structure, or any other place, or any part thereof, used predominantly as a place of residence or abode of any natural person or which is intended for use predominantly as a place of residence or abode of any natural person, including fixtures and fittings belonging thereto and enjoyed therewith;

[Definition of “dwelling” substituted by section 12 of Act 136 of 1992, section 65 of Act 19 of 2001 and section 148 of Act 60 of 2001]

“electronic services” means those electronic services prescribed by the Minister by regulation in terms of this Act;

[Definition of “electronic services” inserted by section 165 of Act 31 of 2013 effective on 1 April 2014]

“employee organization” means an organization in which a number of employees in any particular undertaking, industry, trade, occupation or profession are associated together for the purpose of regulating relations between themselves or some of them and their employers or some of their employers or mainly for that purpose, disregarding the provision of sickness, accident or unemployment benefits for the members of the organization or for the widows, children, dependants or nominees of deceased members;

[Definition of “employee organization” inserted by GN 2695 of 1991 and section 12 of Act 136 of 1992]

“enterprise” means-

(a)     in the case of any vendor, any enterprise or activity which is carried on continuously or regularly by any person in the Republic or partly in the Republic and in the course or furtherance of which goods or services are supplied to any other person for a consideration, whether or not for profit, including any enterprise or activity carried on in the form of a commercial, financial, industrial, mining, farming, fishing, municipal or professional concern or any other concern of a continuing nature or in the form of an association or club;

[Paragraph (a) substituted by section 40 of Act 9 of 2006]

(b)     without limiting the applicability of paragraph (a) in respect of any activity carried on in the form of a commercial, financial, industrial, mining, farming, fishing or professional concern-

(i)      the making of supplies by any public authority of goods or services which the Minister, having regard to the circumstances of the case, is satisfied are of the same kind or are similar to taxable supplies of goods or services which are or might be made by any person other than such public authority in the course or furtherance of any enterprise, if the Commissioner, in pursuance of a decision of the Minister under this subparagraph, has notified such public authority that its supplies of such goods or services are to be treated as supplies made in the course or furtherance of an enterprise;

(ii)     the activities of any welfare organization as respects activities referred to in the definition of “welfare organization” in this section;

(iii)    the activities of any share block company (other than the services in respect of which section 12 (f) applies) where such company has applied for registration as a vendor under the provisions of section 23 (3) and has been registered as such;

[Subparagraph (iii) added by section 12 of Act 136 of 1992]

(v)     the activities of an implementing agency carried on in the course of implementing, operating, administering or managing a foreign donor funded project;

[Subparagraph (v) added by section 101(b) of Act 31 of 2005 and substituted by section 66(1)(a) of Act 34 of 2019 effective on 1 April, 2020]

(vi)    the supply of electronic services by a person from a place in an export country, where at least two of the following circumstances are present:

(aa)   The recipient of those electronic services is a resident of the Republic;

(bb)   any payment to that person in respect of such electronic services originates from a bank registered or authorised in terms of the Banks Act, 1990 (Act 94 of 1990);

(cc)   the recipient of those electronic services has a business address, residential address or postal address in the Republic;

[Sub-paragraph (vi) added by section 165(1)(e) of Act 31 of 2013 and substituted by section 95(1)(a) of Act 43 of 2014 effective on 1 April, 2015. Item (cc) amended by section 8(1)(a) of Act 21 of 2018 effective on 1 April, 2019 and applicable in respect of supplies made on or after that date]

(vii)      the activities of an intermediary:

[Sub-paragraph (vii) added by section 8(1)(a) of Act 21 of 2018 effective on 1 April, 2019 and applicable in respect of supplies made on or after that date]

(c)     ……….

[Paragraph (c) amended by section 22 of Act 97 of 1993 and section 9 of Act 20 of 1994 and deleted by section 40 of Act 9 of 2006]

Provided that-

(i)      anything done in connection with the commencement or termination of any such enterprise or activity shall be deemed to be done in the course or furtherance of that enterprise or activity;

(ii)     any branch or main business of an enterprise permanently situated at premises outside the Republic shall be deemed to be carried on by a person separate from the vendor, if-

(aa)   the branch or main business can be separately identified; and

(bb)   an independent system of accounting is maintained by the concern in respect of the branch or main business;

[Paragraph (ii) substituted by section 22 of Act 97 of 1993, section 9 of Act 20 of 1994 and section 92 of Act 32 of 2004]

(iii)

(aa)   the rendering of services by an employee to his employer in the course of his employment or the rendering of services by the holder of any office in performing the duties of his office, shall not be deemed to be the carrying on of an enterprise to the extent that any amount constituting remuneration as contemplated in the definition of “remuneration” in paragraph 1 of the Fourth Schedule to the Income Tax Act is paid or is payable to such employee or office holder, as the case may be;

[Item (aa) substituted by section 164 of Act 45 of 2003]

(bb)   subparagraph (aa) of this paragraph shall not apply in relation to any employment or office accepted by any person in carrying on any enterprise carried on by him independently of the employer or concern by whom the amount of remuneration is paid or payable;

(iv)    any activity carried on by a natural person essentially as a private or recreational pursuit or hobby or any activity carried on by a person other than a natural person which would, if it were carried on by a natural person, be carried on essentially as a private or recreational pursuit or hobby shall not be deemed to be the carrying on of an enterprise;

(v)     any activity shall to the extent to which it involves the making of exempt supplies not be deemed to be the carrying on of an enterprise;

(vi)    the activity of underwriting insurance business by Underwriting Members of Lloyd’s of London, to the extent that contracts of insurance are concluded in the Republic, shall be deemed to be the carrying on of an enterprise;

[Paragraph (vi) added by GN 2695 of 1991 and section 12 of Act 136 of 1992 and substituted by section 81 of Act 53 of 1999]

(vii) ……….

[Paragraph (vii) added by section 9 of Act 20 of 1994, substituted by section 114 of Act 74 of 2002 and deleted by section 104 of Act 60 of 2008]

(viii)  the making of supplies by a constitutional institution listed in Schedule 1 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), shall be deemed not to be the carrying on of an enterprise;

[Paragraph (viii) inserted by section 164 of Act 45 of 2003]

(ix)    where a person carries on or intends carrying on an enterprise or activity supplying commercial accommodation as contemplated in paragraph (a) of the definition of “commercial accommodation” in section 1, and the total value of taxable supplies made by that person in respect of that enterprise or activity in the preceding period of 12 months or which it can reasonably be expected that that person will make in a period of 12 months, as the case may be, will not exceed R120 000, shall be deemed not to be the carrying on of that enterprise;

[Paragraph (ix) added by section 92 of Act 32 of 2004 and substituted by section 128 of Act 25 of 2015 and section 83 of Act 15 of 2016 effective on 1 April 2017]

(x)     where the Minister is satisfied that an activity of the municipal entity as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000), is of a regulatory nature and if the Commissioner, in pursuance of a decision of the Minister, has notified that ‘municipal entity’ of that decision, the supply of goods or services in respect of that activity by the municipal entity shall be deemed not to be the carrying on of an enterprise;

[Paragraph (x) inserted by section 40 of Act 9 of 2006]

(xi)    the supply of services by a mutual association licensed in terms of section 30 of the Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993), to carry on the business of insurance of employers against their liabilities to employees in terms of that Act in respect of which that mutual association pays compensation that is no greater than compensation that would have been paid in similar circumstances in terms of that Act shall be deemed not to be the carrying on of an enterprise;

[Paragraph (xi) inserted by section 129 of Act 24 of 2011 with effect from 10 January 2012]

(xii)    any activity carried on by a trust contemplated in the definition of “sukuk” in section 24JA (1) of the Income Tax Act shall be deemed not to be the carrying on of an enterprise;

[Paragraph (xii) inserted by section 129 of Act 24 of 2011 effective on from 1 January 2013]

(xiii)   where a person is neither a resident of the Republic, nor a registered vendor and that person supplies or intends to supply to a recipient solely the use or the right of use of ships, aircraft, rolling stock or parts directly in connection thereto under any rental agreement, that activity shall be deemed not to be the carrying on of an enterprise, notwithstanding that those goods are supplied for use in the Republic, if-

(aa)   the supply is made to a recipient that is a resident of the Republic;

(bb)   such goods are supplied for use by the recipient wholly or partly in the Republic; and

(cc)   the recipient and supplier have agreed in writing that the recipient shall—

(A)    in terms of the Customs and Excise Act, enter such goods for home consumption and be liable for the payment of the tax imposed in accordance with section 7(1)(b) and section 13 of this Act; and

(B)    not be reimbursed by the supplier of the movable goods in respect of the tax imposed under section 7(1)(b) of this Act;

[Paragraph (xiii) added by section 61(1) of Act 23 of 2020 and amended by section 27(1)(a) of Act 20 of 2022 effective on 1 January, 2023]

(xiv)  where goods are supplied by a “qualifying purchaser” to another “qualifying purchaser” on a “flash title” basis as respectively defined in the regulations issued in terms of section 74(1)(contained in Government Notice No. R.316 published in Government Gazette No. 37580 of 2 May 2014) read with paragraph (d) of the definition of “exported” in section 1(1), the activity of the first-mentioned qualifying purchaser shall be deemed not to be the carrying on of an enterprise in the Republic provided that the documentary requirements prescribed in regulation 10 of the regulation referred to in paragraph (d) of the definition of “exported” in section 1(1) are complied with: Provided further that the provisions of this paragraph shall not apply where the first-mentioned qualifying purchaser applies in writing to the Commissioner and the Commissioner, having regard to the circumstances of the case, directs that the provisions of this section shall not apply to such first-mentioned qualifying purchaser;

[Paragraph (xiv) added by section 27(1)(b) of Act 20 of 2022 effective on 1 January, 2023]

(xv)   the activities of the Corporation for Deposit Insurance established in terms of section 166AE of the Financial Sector Regulation Act, 2017 (Act 9 of 2017), shall to the extent that it makes supplies of deposit insurance as contemplated in section 166AF(1) of that Act be deemed not to be the carrying on of an enterprise;

[Paragraph (xv) added by section 46(1) of Act 17 of 2023 effective on 1 April, 2024]

“entertainment” means the provision of any food, beverages, accommodation, entertainment, amusement, recreation or hospitality of any kind by a vendor whether directly or indirectly to anyone in connection with an enterprise carried on by him;

“exempt supply” means a supply that is exempt from tax under section 12;

“export country” means any country other than the Republic and includes any place which is not situated in the Republic: Provided that the President may by notice in the Gazette determine that a specific country or territory shall from a date and to the extent indicated in the notice, be deemed not to be an export country;

[Definition of “export country” substituted by section 12 of Act 136 of 1992 and section 9 of Act 20 of 1994]

“exported”, in relation to any movable goods supplied by any vendor under a sale or an instalment credit agreement, means-

(a)     consigned or delivered by the vendor to the recipient at an address in an export country as evidenced by documentary proof acceptable to the Commissioner; or

(b)     delivered by the vendor to the owner or charterer of any foreign-going ship contemplated in paragraph (a) or (c) of the definition of “foreign-going ship” or to a foreign-going aircraft when such ship or aircraft is going to a destination in an export country and such goods are for use or consumption in such ship or aircraft, as the case may be; or

[Paragraph (b) substituted by section 119 of Act 7 of 2010 effective on 2 November 2010]

(c)     delivered by the vendor to the owner or charterer of any foreign-going ship contemplated in paragraph (b) of the definition of “foreign-going ship” for use in such ship; or

(d)     removed from the Republic by the recipient or recipient’s agent for conveyance to an export country in accordance with any regulation made by the Minister in terms of this Act;

[Paragraph (d) amended by section 22 of Act 97 of 1993 and substituted by section 9 of Act 20 of 1994 and section 165 of Act 31 of 2013 effective on 1 April 2014]

“financial services” means the activities which are deemed by section 2 to be financial services;

“fixed property” means land (together with improvements affixed thereto), any unit as defined in section 1 of the Sectional Titles Act, 1986 (Act No. 95 of 1986), any share in a share block company which confers a right to or an interest in the use of immovable property, and, in relation to a property time-sharing scheme, any time-sharing interest as defined in section 1 of the Property Time-sharing Control Act, 1983 (Act No. 75 of 1983); and any real right in any such land, unit, share or time-sharing interest;

[Definition of “fixed property” substituted by GN 2695 of 1991 and section 12 of Act 136 of 1992]

“foreign donor funded project” means a project established in terms of an official development assistance agreement to supply goods or services to beneficiaries, to which the government of the Republic is a party, and which-

(a)     is binding on the Republic in terms of section 231(3) of the Constitution of the Republic of South Africa, 1996;

(b)     provides that the international donor funding must not be subject to tax; and

(c)     has been approved by the Minister of Finance as a foreign donor funded project for the purposes of the definition;

[Definition of “foreign donor funded project” inserted by section 101(c) of Act 31 of 2005 and substituted by section 77(c) of Act 20 of 2006 and by section 66(1)(b) of Act 34 of 2019 effective on 1 April, 2020]

“foreign-going aircraft” means any –

(a)     aircraft engaged in the transportation for reward of passengers or goods wholly or mainly on flights between airports in the Republic and airports in export countries or between airports in export countries; or

(b)     foreign military aircraft;

[Definition of “foreign-going aircraft” substituted by section 9 of Act 20 of 1994 and section 119 of Act 7 of 2010 effective on 2 November 2010]

“foreign-going ship” means-

(a)     any ship or other vessel engaged in the transportation for reward of passengers or goods wholly or mainly on voyages between ports in the Republic and ports in export countries or between ports in export countries;

[Paragraph (a) amended by section 119 of Act 7 of 2010 effective on 2 November 2010]

(b)     any ship or other vessel registered in an export country where such ship or vessel is utilized for the purposes of a commercial, fishing or other concern conducted outside the Republic by a person who is not a vendor and is not a resident of the Republic; or

[Paragraph (b) amended by section 119 of Act 7 of 2010 effective on 2 November 2010]

(c)     any foreign naval ship;

[Paragraph (c) inserted by section 119 of Act 7 of 2010 effective on 2 November 2010]

[Definition of “foreign-going ship” substituted by section 9 of Act 20 of 1994]

“goods” means corporeal movable things, fixed property, any real right in any such thing or fixed property, and electricity, but excluding-

[Words preceding paragraph (a) substituted by section 104 of Act 60 of 2008]

(a)     money;

(b)     any right under a mortgage bond or pledge of any such thing or fixed property; and

(c)     any stamp, form or card which has a money value and has been sold or issued by the State for the payment of any tax or duty levied under any Act of Parliament, except when subsequent to its original sale or issue it is disposed of or imported as a collector’s piece or investment article;

“grant” means any appropriation, grant in aid, subsidy or contribution transferred, granted or paid to a vendor by a public authority, municipality or constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), but does not include-

(a)     a payment made for the supply of any goods or services to that public authority or municipality, including all goods or services supplied to a public authority, municipality or constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999) in accordance with a procurement process prescribed-

(i)    in terms of the Regulations issued under section 76(4)(c) of the Public Finance Management Act, 1999 (Act No. 1 of 1999); or

(ii)   in terms of Chapter 11 of the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003), or any other similar process; or

(b)     a payment contemplated in section 8(23);

[Paragraph (b) substituted by section 128 of Act 25 of 2015 and section 77 of Act 17 of 2017 effective on 1 April 2017]

[Definition of “grant” inserted by section 92 of Act 32 of 2004 and substituted by section 40 of Act 9 of 2006]

“implementing agency” means-

(a)     the government of the Republic in the national, provincial or local sphere; or

(b)     any institution or body established and appointed by a foreign government, as contemplated in section 10(1)(bA)(ii) of the Income Tax Act; or

(c)     any person who has entered into a contract directly with the party contemplated in paragraph (a) or (b),

to implement, operate, administer or manage a foreign donor funded project;

[Definition of “implementing agency” inserted by section 66(1)(c) of Act 34 of 2019 effective on 1 April, 2020]

“imported services” means a supply of services that is made by a supplier who is resident or carries on business outside the Republic to a recipient who is a resident of the Republic to the extent that such services are utilized or consumed in the Republic otherwise than for the purpose of making taxable supplies;

“inbound insurance policy” means a travel policy which provides insurance cover in respect of a passenger transported from an export country into the Republic or between two places in the Republic as part of an international journey;

[Definition of “inbound insurance policy” inserted by section 77(1)(b) of Act 17 of 2017 and substituted by section 89(a) of Act 23 of 2018]

“inbound duty and tax free shop” means an inbound duty and tax free shop as contemplated in the Customs and Excise Act;

[Definition of “inbound duty and tax free shop” inserted by section 104 of Act 60 of 2008]

“Income Tax Act” means the Income Tax Act, 1962 (Act No. 58 of 1962);

“input tax”, in relation to a vendor, means-

(a)     tax charged under section 7 and payable in terms of that section by-

(i)     a supplier on the supply of goods or services made by that supplier to the vendor; or

(ii)   the vendor on the importation of goods by that vendor; or

[Subparagraph (ii) substituted by section 19 of Act 44 of 2014 effective on 20 January 2015]

(iii)  the vendor under the provisions of section 7(3);

(b)     an amount equal to the tax fraction (being the tax fraction applicable at the time the supply is deemed to have taken place) of the lesser of any consideration in money given by the vendor for or the open market value of the supply (not being a taxable supply) to him by way of a sale on or after the commencement date by a resident of the Republic (other than a person or diplomatic or consular mission of a foreign country established in the Republic that was granted relief, by way of a refund of tax as contemplated in section 68) of any second-hand goods situated in the Republic;

[Paragraph (b) substituted by GN 2695 of 1991 and section 12 of Act 136 of 1992, amended by section 22 of Act 97 of 1993, substituted by section 9 of Act 20 of 1994 and amended by section 23 of Act 27 of 1997 and section 104 of Act 35 of 2007]

[Proviso to paragraph (b) deleted by section 129 of Act 24 of 2011 with effect from 10 January 2012]

(c)     an amount equal to the tax fraction of the consideration in money deemed by section 10(16) to be for the supply (not being a taxable supply) by a debtor to the vendor of goods repossessed under an instalment credit agreement or a surrender of goods: Provided that the tax fraction applicable under this paragraph shall be the tax fraction applicable at the time of supply of the goods to the debtor under such agreement as contemplated in section 9(3)(c),

[Words preceding the proviso substituted by section 165 of Act 31 of 2013 effective on 1 April 2014]

where the goods or services concerned are acquired by the vendor wholly for the purpose of consumption, use or supply in the course of making taxable supplies or, where the goods or services are acquired by the vendor partly for such purpose, to the extent (as determined in accordance with the provisions of section 17) that the goods or services concerned are acquired by the vendor for such purpose;

“instalment credit agreement” means any agreement entered into on or after the commencement date whereby any goods consisting of corporeal movable goods or of any machinery or plant, whether movable or immovable-

(a)     are supplied under a sale under which-

(i)      the goods are sold by the seller to the purchaser against payment by the purchaser to the seller of a stated or determinable sum of money at a stated or determinable future date or in whole or in part in instalments over a period in the future; and

(ii)     such sum of money includes finance charges, including any amount determined with reference to the time value of money, stipulated in the lease; and

[Subparagraph (ii) substituted by section 145 of Act 22 of 2012 effective on 1 January 2013]

(iii)  the aggregate of the amounts payable by the purchaser to the seller under such agreement exceeds the cash value of the supply; and

(iv)

(aa)   the purchaser does not become the owner of those goods merely by virtue of the delivery to or the use, possession or enjoyment by him thereof; or

(bb)   the seller is entitled to the return of those goods if the purchaser fails to comply with any term of that agreement; or

(b)     are supplied under a lease under which-

(i)      the rent consists of a stated or determinable sum of money payable at a stated or determinable future date or periodically in whole or in part in instalments over a period in the future; and

(ii)   such sum of money includes finance charges stipulated in the lease; and

(iii)    the aggregate of the amounts payable under such lease by the lessee to the lessor for the period of such lease (disregarding the right of any party thereto to terminate the lease before the end of such period) and any residual value of the leased goods on termination of the lease, as stipulated in the lease, exceeds the cash value of the supply; and

(iv)    the lessee is entitled to the possession, use or enjoyment of those goods for a period of at least 12 months; and

(v)

(aa)   the lessee accepts the full risk of destruction or loss of, or other disadvantage to, those goods and assumes all obligations of whatever nature arising in connection with the insurance, maintenance and repair of those goods while the agreement remains in force; or

(bb)

(A)    the lessor accepts the full risk of destruction or loss of, or other disadvantage to those goods and assumes all obligations of whatever nature arising in connection with the insurance of those goods; and

(B)    the lessee accepts the full risk of maintenance and repair of those goods and reimburses the lessor for the insurance of those goods,

while the agreement remains in force;

[Paragraph (b) substituted by section 145 of Act 22 of 2012 effective on 1 January 2013]

“insurance” means insurance or guarantee against loss, damage, injury or risk of any kind whatever, whether pursuant to any contract or law, and includes reinsurance; and “contract of insurance” includes a policy of insurance, an insurance cover, and a renewal of a contract of insurance: Provided that nothing in this definition shall apply to any insurance specified in section 2;

“intermediary” means a person who facilitates the supply of electronic services supplied by the electronic services supplier and who is responsible for issuing the invoices and collecting payment for the supply;

[Definition of “intermediary” inserted by section 8(1)(b) of Act 21 of 2018 effective on 1 April, 2019 and applicable in respect of supplies made on or after that date]

“international journey” means a journey commencing from the “point of departure” in the Republic to a destination outside the Republic (and vice versa), including (where applicable) stopovers en route to the destination, time spent in the destination country and the return journey;

[Definition of “international journey” inserted by section 77(1)(c) of Act 17 of 2017 and substituted by section 89(b) of Act 23 of 2018]

“invoice” means a document notifying an obligation to make payment;

“licensed customs and excise storage warehouse” means a ware­house licensed by the Commissioner at any place appointed for that purpose under the provisions of the Customs and Excise Act, which has been approved by the Commissioner for the storage of goods as he may approve in respect of that warehouse;

[Definition of “licensed customs and excise storage warehouse” inserted by section 101 of Act 31 of 2005]

“Minister” means the Minister of Finance;

“money” means-

(a)     coins (other than coins made wholly or mainly from a precious metal other than silver) which the South African Reserve Bank has issued in the Republic in accordance with the provisions of section 14 of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989), or which remain in circulation as contemplated in the proviso to subsection (1) of that section, and any paper currency which under the said Act is a legal tender;

(b)

(i)      any coin (other than a coin made wholly or mainly from a precious metal) or paper currency of any country other than the Republic which is used or circulated or is intended for use or circulation as currency;

(ii)   any bill of exchange, promissory note, bank draft, postal order or money order,

except when disposed of or imported as a collector’s piece, investment article or item of numismatic interest;

“month” means any of the twelve portions into which any calendar year is divided;

[Definition of “month” inserted by section 164 of Act 45 of 2003]

“motor car” includes a motor car, station wagon, minibus, double cab light delivery vehicle and any other motor vehicle of a kind normally used on public roads, which has three or more wheels and is constructed or converted wholly or mainly for the carriage of passengers, but does not include-

(a)     vehicles capable of accommodating only one person or suitable for carrying more than 16 persons, or

(b)     vehicles of an unladen mass of 3 500 kilograms or more; or

(c)     caravans and ambulances;

(d)     vehicles constructed for a special purpose other than the carriage of persons and having no accommodation for carrying persons other than such as is incidental to that purpose;

(e)     game viewing vehicles (other than sedans, station wagons, mini-buses or double cab light delivery vehicles) constructed or permanently converted for the carriage of seven or more passengers for game viewing in national parks, game reserves, sanctuaries or safari areas and used exclusively for that purpose, other than use which is merely incidental and subordinate to that use; or

(f)     vehicles, constructed as or permanently converted into hearses for the transport of deceased persons and used exclusively for that purpose;

[Definition of “motor car” amended by section 76 of Act 30 of 2000 and section 92 of Act 32 of 2004]

“municipality” means a municipality as defined in section 1 of the Income Tax Act;

[Definition of “municipality” inserted by section 40 of Act 9 of 2006 and substituted by section 77 of Act 20 of 2006 and section 81 of Act 8 of 2007]

“municipal rate” means a rate levied by a municipality in terms of section 2 of the Local Government: Municipal Property Rates Act, 2004 (Act No. 6 of 2004), on ‘rateable property’ of an ‘owner’ as defined in section 1 of that Act respectively: Provided that a municipal rate does not include-

(a)     a single charge levied by that municipality for rates and other supplies of goods or services such as-

(i)      electricity, gas, water; or

(ii)   drainage, removal or disposal of sewage or garbage; or

(iii)  goods or services that are incidental to, or necessary for the supply of those goods or services, to that owner; or

(b)     a rate levied in respect of supplies of goods or services contemplated in paragraph (a);

[Definition of “municipal rate” inserted by section 40 of Act 9 of 2006]

“open market value” in relation to the supply of goods or services, means the open market value thereof determined in accordance with the provisions of section 3;

“outbound insurance policy” means a travel policy which provides insurance cover in respect of a passenger transported from the Republic to a destination in an export country or from a place outside the Republic to another destination outside the Republic as part of an international journey;

[Definition of “outbound insurance policy” inserted by section 77(1)(d) of Act 17 of 2017 and substituted by section 89(c) of Act 23 of 2018]

“output tax”, in relation to any vendor, means the tax charged under section 7(1)(a) in respect of the supply of goods and services by that vendor;

“person” includes any public authority, any municipality, any company, any body of persons (corporate or unincorporated), the estate of any deceased or insolvent person and any trust fund;

[Definition of “person” substituted by section 101(e) of Act 31 of 2005, by section 40(1)(k) of Act 9 of 2006 and by section 66(1)(d) of Act 34 of 2019 effective on 1 April, 2020]

“precious metals” means gold, silver, platinum, iridium and any other metals of the platinum group, and any other metal which the State President has by proclamation in the Gazette declared to be a precious metal for the purpose of this Act;

“prescribed rate” in relation to any interest payable in terms of this Act means a rate equal to the rate fixed from time to time by the Minister by notice in the Gazette in terms of section 80(1)(b) of the Public Finance Management Act, 1999 (Act No. 1 of 1999): Provided that where the Minister fixes a new rate in terms of that Act, that new rate applies for purposes of this Act from the first day of the second month following the date on which that new rate came into operation;

[Definition of “prescribed rate” inserted by section 1 of Act 61 of 1993, amended by section 9 of Act 20 of 1994, GN 1505 of 1998, GN 541 of 1999, GN 1065 of 1999, GN 184 of 2000 and GN 1160 of 2002 and substituted by section 114 of Act 74 of 2002 and section 43 of Act 16 of 2004]

[Definition of “prescribed rate” to be substituted by section 271 of Act 28 of 2011 with effect from a date determined by the President by proclamation in the Gazette]

“public authority” means-

(i)      any department or division of the public service as listed Schedules 1, 2 or 3 of the Public Service Act, 1994 (Act No. 103 of 1994); or

(ii)    any public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999); or

(iii)   any other public entity designated by the Minister for the purposes of this Act to be a public authority;

[Definition of “public authority” substituted by section 148 of Act 60 of 2001 and section 92 of Act 32 of 2004]

“recipient”, in relation to any supply of goods or services, means the person to whom the supply is made

“rental agreement” means-

(a)     any agreement entered into before, on or after the commencement date for the letting of goods, other than a lease referred to in paragraph (b) of the definition of “instalment credit agreement” in this section or a financial lease as defined in the Sales Tax Act, 1978 (Act No. 103 of 1978), prior to its repeal; and

(b)     any rental agreement, as defined in the said Act where such agreement is in force on or after the commencement date;

“Republic”, in the geographical sense, means the territory of the Republic of South Africa and includes the territorial waters, the contiguous zone and the continental shelf referred to respectively in sections 4, 5 and 8 of the Maritime Zones Act, 1994 (Act No. 15 of 1994);

[Definition of “Republic” substituted by section 18 of Act 37 of 1996]

“resident of the Republic” means a resident as defined in section 1 of the Income Tax Act: Provided that any other person or any other company shall be deemed to be a resident of the Republic to the extent that such person or company carries on in the Republic any enterprise or other activity and has a fixed or permanent place in the Republic relating to such enterprise or other activity;

[Definition of “resident of the Republic” amended by section 64 of Act 59 of 2000]

“returnable container” means any container belonging to a class of containers in relation to which, at the time of delivery of the contents thereof, ownership of that container is not transferred to the recipient of the contents and a specifically identified amount is usually charged as a deposit by the supplier of the contents upon the express undertaking of the supplier that upon the return of that container such deposit will be refunded or allowed as a credit to such recipient or any other person returning such container;

“sale” means an agreement of purchase and sale and includes any transaction or act whereby or in consequence of which ownership of goods passes or is to pass from one person to another;

“second-hand goods” means-

(a)     goods which were previously owned and used; or

(b)     in respect of the transfer of a unit in the circumstances referred to in Item 8 of Schedule 1 to the Share Blocks Control Act, such unit,

but does not include-

(i)      animals;

(ii)

(aa)   goods consisting solely of gold unless acquired for the sole purpose of supplying such goods in the same state without any further processing;

(bb)   gold coins contemplated in section 11(1)(k); or

(cc)   any other goods containing gold unless those goods are acquired for the sole purpose of supplying those goods in the same or substantially the same state to another person;

[Subparagraph (ii) amended by section 104 of Act 60 of 2008 and substituted by section 95 of Act 43 of 2014 and section 83 of Act 15 of 2016 effective on 1 April 2017]

(iii)    any prospecting right, mining right, exploration right, production right, mining permit, retention permit or reconnaissance permit as defined in section 1 of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002), or any reconnaissance permission contemplated in section 14 of that Act granted or renewed in terms of that Act or received upon conversion pursuant to Schedule II, except when that prospecting right, mining right, exploration right, production right or interest in that right is transferred, ceded, let, sublet, alienated, varied or otherwise disposed of as contemplated in section 11 of the Mineral and Petroleum Resources Development Act, 2002;

[Paragraph (iii) added by section 164 of Act 45 of 2003 and substituted by section 43 of Act 16 of 2004]

[Definition of “second-hand goods” substituted by GN 2695 of 1991, section 12 of Act 136 of 1992 and section 9 of Act 20 of 1994 and amended by section 164 of Act 45 of 2003]

“services” means anything done or to be done, including the granting, assignment, cession or surrender of any right or the making available of any facility or advantage, but excluding a supply of goods, money or any stamp, form or card contemplated in paragraph (c) of the definition of “goods”;

[Definition of “services” substituted by section 12 of Act 136 of 1992]

“SEZ operator” means an operator defined in section 1 of the Special Economic Zones Act;

[Definition of “SEZ operator” inserted by section 23 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014, (Act No. 16 of 2014) is operational, 9 February 2016]

“Special Economic Zone” or “SEZ” has the meaning assigned thereto in section 21A(1) of the Customs and Excise Act;

[Definition of “Special Economic Zone” or “SEZ” inserted by section 23 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act2014, (Act No. 16 of 2014) is operational, 9 February 2016]

“share block company” means a share block company as defined in section 1 of the Share Blocks Control Act;

[Definition of “share block company” inserted by section 12 of Act 136 of 1992 and substituted by section 9 of Act 20 of 1994]

“Share Blocks Control Act” means the Share Blocks Control Act, 1980 (Act No. 59 of 1980);

[Definition of “Share Blocks Control Act” inserted by section 9 of Act 20 of 1994]

“shareholder”–

(a)     in relation to any company referred to in paragraph (a), (b) or (d) of the definition of ‘company” in section 1(1) of the Income Tax Act, means the registered shareholder in respect of any share, except that where some person other than the registered shareholder is entitled, whether by virtue of any provision in the memorandum or articles of association of the company or under the terms of any agreement or contract, or otherwise, to all or part of the benefit of the rights of participation in the profits, income or capital attaching to the share so registered, that other person shall, to the extent that such person is entitled to such benefit, also be deemed to be a shareholder; or

(b)     in relation to any close corporation, means a member of such corporation; or

(c)     in relation to any co-operative, means a member of such co-operative;

[Definition of “shareholder” inserted by section 128 of Act 25 of 2015 effective on 1 April 2012 – Date of operation in section 128 of Act 25 of 2015 as amended by section 106 of Act 15 of 2016]

“South African Revenue Service” means the South African Revenue Service established by section 2 of the South African Revenue Service Act, 1997;

[Definition of “South African Revenue Service” inserted by section 34 of Act 34 of 1997]

“Special Economic Zones Act” means the Special Economic Zones Act, 2014 (Act No. 16 of 2014);

[Definition of “Special Economic Zones Act” inserted by section 19 of Act 44 of 2014 effective on the date on which the Special Economic Zones Act is operational, 9 February 2016 – Date of operation in section 19 of Act 44 of 2014 as amended by section 82 of Act 16 of 2016]

“Stamp Duties Act” means the Stamp Duties Act, 1968 (Act No. 77 of 1968);

[Definition of “Stamp Duties Act” inserted by section 9 of Act 20 of 1994]

“supplier”, in relation to any supply of goods or services, means the person supplying the goods or services;

“supply” includes performance in terms of a sale, rental agreement, instalment credit agreement and all other forms of supply, whether voluntary, compulsory or by operation of law, irrespective of where the supply is effected, and any derivative of “supply” shall be construed accordingly;

[Definition of “supply” substituted by section 81 of Act 53 of 1999]

“surrender of goods” means the termination of any instalment credit agreement by the debtor and subsequent obligation on the creditor, to that agreement, to take possession of any goods previously supplied under that agreement;

[Definition of “surrender of goods” inserted by section 165 of Act 31 of 2013 effective on 1 April 2014]

“tax” means the tax chargeable in terms of this Act;

[Definition of “tax” substituted by GN 2695 of 1991 and section 12 of Act 136 of 1992]

“Tax Administration Act” means the Tax Administration Act, 2011;

[Definition of “Tax Administration Act” inserted by section 271 of Act 28 of 2011 effective on 1 October 2012]

“taxable supply” means any supply of goods or services which is chargeable with tax under the provisions of section 7 (1) (a), including tax chargeable at the rate of zero per cent under section 11;

“tax fraction” means the fraction calculated in accordance with the formula:

r

______

100 + r

in which formula “r” is the rate of tax applicable under section 7 (1);

“surrender of goods” means the termination of any instalment credit agreement by the debtor and subsequent obligation on the creditor, to that agreement, to take possession of any goods previously supplied under that agreement;

[Definition of “surrender of goods” inserted by section 165 of Act 31 of 2013 effective on 1 April 2014]

“tax” means the tax chargeable in terms of this Act;

[Definition of “tax” substituted by GN 2695 of 1991 and section 12 of Act 136 of 1992]

“Tax Administration Act” means the Tax Administration Act, 2011;

[Definition of “Tax Administration Act” inserted by section 271 of Act 28 of 2011 effective on 1 October 2012]

“taxable supply” means any supply of goods or services which is chargeable with tax under the provisions of section 7 (1) (a), including tax chargeable at the rate of zero per cent under section 11;

“tax fraction” means the fraction calculated in accordance with the formula:

r

______

100 + r

in which formula “r” is the rate of tax applicable under section 7 (1);

“tax invoice” means a document provided as required by section 20;

“this Act” includes the regulations;

“Transfer Duty Act” means the Transfer Duty Act, 1949 (Act No. 40 of 1949);

[Definition of “Transfer Duty Act” inserted by section 9 of Act 20 of 1994]

“transitional metropolitan council” means a transitional metropolitan council as defined in section 1 of the Local Government Transition Act, 1993 (Act No. 209 of 1993);

[Definition of “transitional metropolitan council” inserted by section 9 of Act 20 of 1994]

“trust fund” means any fund consisting of cash or other assets the administration and control of which is entrusted to any person acting in a fiduciary capacity by any person, whether under a deed of trust or by agreement, or by a deceased person under a will made by that person;

[Definition of “trust fund” substituted by section 21 of Act 136 of 1991]

“tax invoice” means a document provided as required by section 20;

“this Act” includes the regulations;

“Transfer Duty Act” means the Transfer Duty Act, 1949 (Act No. 40 of 1949);

[Definition of “Transfer Duty Act” inserted by section 9 of Act 20 of 1994]

“transitional metropolitan council” means a transitional metropolitan council as defined in section 1 of the Local Government Transition Act, 1993 (Act No. 209 of 1993);

[Definition of “transitional metropolitan council” inserted by section 9 of Act 20 of 1994]

“VAT registration number”, in relation to any vendor, means the number allocated to that vendor by the Commissioner in terms of section 24 of the Tax Administration Act;

[Definition of “VAT registration number” inserted by section 43 of Act 16 of 2004 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

“trust fund” means any fund consisting of cash or other assets the administration and control of which is entrusted to any person acting in a fiduciary capacity by any person, whether under a deed of trust or by agreement, or by a deceased person under a will made by that person;

[Definition of “trust fund” substituted by section 21 of Act 136 of 1991]

“VAT registration number”, in relation to any vendor, means the number allocated to that vendor by the Commissioner in terms of section 24 of the Tax Administration Act;

[Definition of “VAT registration number” inserted by section 43 of Act 16 of 2004 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

“vendor” means any person who is or is required to be registered under this Act: Provided that where the Commissioner has under section 23 or 50A determined the date from which a person is a vendor that person shall be deemed to be a vendor from that date;

[Definition of “vendor” amended by section 23 of Act 27 of 1997]

“welfare organisation” means any public benefit organisation contemplated in paragraph (a) of the definition of ‘public benefit organisation’ 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, if it carries on or intends to carry on any welfare activity determined by the Minister for purposes of this Act, relating to those activities that fall under the headings-

(a)     welfare and humanitarian;

(b)     health care;

(c)     land and housing;

(d)     education and development; or

(e)     conservation, environment and animal welfare.

[Definition of “welfare organization” substituted by section 21 of Act 136 of 1991, GN 2695 of 1991, section 12 of Act 136 of 1992, section 81 of Act 53 of 1999, section 148 of Act 60 of 2001 and section 92 of Act 32 of 2004 and amended by section 77 of Act 20 of 2006]

(2)     Unless the context indicates otherwise, a word or expression to which a meaning has been assigned in the Tax Administration Act bears that meaning for purposes of this Act.

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

“vendor” means any person who is or is required to be registered under this Act: Provided that where the Commissioner has under section 23 or 50A determined the date from which a person is a vendor that person shall be deemed to be a vendor from that date;

[Definition of “vendor” amended by section 23 of Act 27 of 1997]

“welfare organisation” means any public benefit organisation contemplated in paragraph (a) of the definition of ‘public benefit organisation’ 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, if it carries on or intends to carry on any welfare activity determined by the Minister for purposes of this Act, relating to those activities that fall under the headings-

(a)     welfare and humanitarian;

(b)     health care;

(c)     land and housing;

(d)     education and development; or

(e)     conservation, environment and animal welfare.

[Definition of “welfare organization” substituted by section 21 of Act 136 of 1991, GN 2695 of 1991, section 12 of Act 136 of 1992, section 81 of Act 53 of 1999, section 148 of Act 60 of 2001 and section 92 of Act 32 of 2004 and amended by section 77 of Act 20 of 2006]

(2)     Unless the context indicates otherwise, a word or expression to which a meaning has been assigned in the Tax Administration Act bears that meaning for purposes of this Act.

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

(2)     For the purposes of subsection (1)-

(i)      “cheque” means a bill drawn on a bank payable on demand, a postal order, a money order, a traveller’s cheque, or any order or authorisation (whether in writing, by electronic means, or otherwise) to a financial institution to credit or debit any account;

[Paragraph (i) substituted by section 10 of Act 20 of 1994 and section 93 of Act 32 of 2004]

(ii)     “currency” means any banknote or other currency of any country, other than when used as a collector’s piece, investment article, item of numismatic interest, or otherwise than as a medium of exchange;

(iii)  “debt security” means-

(aa)     an interest in or right to be paid money; or

(bb)     an obligation or liability to pay money

that is, or is to be, owing by any person, but does not include a cheque;

[Paragraph (iii) substituted by section 149 of Act 60 of 2001]

(iiiA)  “derivative” means a derivative as defined in and within the scope of International Financial Reporting Standard 9 issued by the International Accounting Standards Board;

[Definition of “derivative” inserted by section 93(c) of Act 32 of 2004 and substituted by section 130(1)(a) of Act 24 of 2011 and by section 47(1) of Act 17 of 2023 with effect from 1 January, 2024]

(iv)    “equity security” means any interest in or right to a share in the capital of a juristic person or the interest in a close corporation of a member thereof;

(v)     “life insurance policy” means any policy of insurance issued in the ordinary course of carrying on a life insurance business as defined in section 1(1) of the Insurance Act, 2017 (Act 18 of 2017);

[Definition of “life insurance policy” substituted by section 22(a) of Act 136 of 1991, by the definition of “long-term insurance policy” in section 19(1)(h) of Act 37 of 1996, by section 82(b) of Act 53 of 1999 and by the definition of “life insurance policy” in section 49(b) of Act 20 of 2021]

(vA)  “merchant’s discount” means a charge made to merchants for accepting a credit or debit card as payment for the supply of goods or services, or a similar charge made by a buying organisation;

[Definition of “merchant’s discount” inserted by section 87 of Act 30 of 1998]

(vi)    “participatory security” means a participatory interest as defined in section 1 of the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002), but does not include an equity security, a debt security, money or a cheque;

[Definition of “participatory security” substituted by section 115 of Act 74 of 2002 and section 78 of Act 20 of 2006]

(vii)   “superannuation scheme” means a scheme whereby provision is made for the payment or granting of benefits by a benefit fund, pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund as defined in section 1 of the Income Tax Act.

[Definition of “superannuation scheme” substituted by section 10 of Act 20 of 1994 and section 130 of Act 24 of 2011 with effect from 10 January 2012]

2. Financial services

(1)     For the purposes of this Act, the following activities shall be deemed to be financial services:

(a)     The exchange of currency (whether effected by the exchange of bank notes or coin, by crediting or debiting accounts, or otherwise);

(b)     the issue, payment, collection or transfer of ownership of a cheque or letter of credit;

(c)     the issue, allotment, drawing, acceptance, endorsement or transfer of ownership of a debt security;

(d)     the issue, allotment or transfer of ownership of an equity security or a participatory security;

(e)     ……….

[Paragraph (e) deleted by section 19 of Act 37 of 1996]

(f)     the provision by any person of credit under an agreement by which money or money’s worth is provided by that person to another person who agrees to pay in the future a sum or sums exceeding in the aggregate the amount of such money or money’s worth;

[Paragraph (f) substituted by section 19 of Act 37 of 1996]

(g)     ……….

[Paragraph (g) deleted by section 19 of Act 37 of 1996]

(h)     ……….

[Paragraph (h) deleted by section 19 of Act 37 of 1996]

(i)      the provision, or transfer of ownership, of a life insurance policy, the provision or transfer of ownership of reinsurance in respect of any such policy: Provided that such an activity shall not be deemed to be a financial service to the extent that it includes the management of a superannuation scheme;

[Paragraph (i) substituted by section 19(1)(d) of Act 37 of 1996, amended by section 67(1) of Act 34 of 2019 and substituted by section 49(a) of Act 20 of 2021]

(j)      the provision, or transfer of ownership, of an interest in a superannuation scheme;

[Paragraph (j) substituted by section 19 of Act 37 of 1996]

(k)     the buying or selling of any derivative or the granting of an option: Provided that where a supply of the underlying goods or services takes place, that supply shall be deemed to be a separate supply of goods or services at the open market value thereof: Provided further that the open market value of those goods or services shall not be deemed to be consideration for a financial service as contemplated in this paragraph;

[Paragraph (k) substituted by section 13 of Act 136 of 1992 and section 82 of Act 53 of 1999 and amended by section 93 of Act 32 of 2004 and section 41 of Act 9 of 2006]

(l)      ……….

[Paragraph (l) deleted by section 44 of Act 16 of 2004]

(m)    ……….

[Paragraph (m) deleted by section 10 of Act 20 of 1994]

(n)      ……….

[Paragraph (n) substituted by section 10 of Act 20 of 1994 and deleted by section 19 of Act 37 of 1996]

(o)     the issue, acquisition, collection, buying or selling or transfer of ownership of any cryptocurrency:

[Paragraph (o) added by section 90(1)(a) of Act 23 of 2018 effective on 1 April, 2019]

Provided that the activities contemplated in paragraphs (a), (b), (c), (d), (f) and (o) shall not be deemed to be financial services to the extent that the consideration payable in respect thereof is any fee, commission, merchant’s discount or similar charge, excluding any discount cost.

[Subsection (1) amended by section 19(1)(g) of Act 37 of 1996, by section 87(1)(a) of Act 30 of 1998 and by section 90(1)(b) of Act 23 of 2018 effective on 1 April, 2019]

(2)     For the purposes of subsection (1)-

(i)      “cheque” means a bill drawn on a bank payable on demand, a postal order, a money order, a traveller’s cheque, or any order or authorisation (whether in writing, by electronic means, or otherwise) to a financial institution to credit or debit any account;

[Paragraph (i) substituted by section 10 of Act 20 of 1994 and section 93 of Act 32 of 2004]

(ii)     “currency” means any banknote or other currency of any country, other than when used as a collector’s piece, investment article, item of numismatic interest, or otherwise than as a medium of exchange;

(iii)  “debt security” means-

(aa)     an interest in or right to be paid money; or

(bb)     an obligation or liability to pay money

that is, or is to be, owing by any person, but does not include a cheque;

[Paragraph (iii) substituted by section 149 of Act 60 of 2001]

(iiiA)  “derivative” means a derivative as defined in and within the scope of International Financial Reporting Standard 9 issued by the International Accounting Standards Board;

[Definition of “derivative” inserted by section 93(c) of Act 32 of 2004 and substituted by section 130(1)(a) of Act 24 of 2011 and by section 47(1) of Act 17 of 2023 with effect from 1 January, 2024]

(iv)    “equity security” means any interest in or right to a share in the capital of a juristic person or the interest in a close corporation of a member thereof;

(v)     “life insurance policy” means any policy of insurance issued in the ordinary course of carrying on a life insurance business as defined in section 1(1) of the Insurance Act, 2017 (Act 18 of 2017);

[Definition of “life insurance policy” substituted by section 22(a) of Act 136 of 1991, by the definition of “long-term insurance policy” in section 19(1)(h) of Act 37 of 1996, by section 82(b) of Act 53 of 1999 and by the definition of “life insurance policy” in section 49(b) of Act 20 of 2021]

(vA)  “merchant’s discount” means a charge made to merchants for accepting a credit or debit card as payment for the supply of goods or services, or a similar charge made by a buying organisation;

[Definition of “merchant’s discount” inserted by section 87 of Act 30 of 1998]

(vi)    “participatory security” means a participatory interest as defined in section 1 of the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002), but does not include an equity security, a debt security, money or a cheque;

[Definition of “participatory security” substituted by section 115 of Act 74 of 2002 and section 78 of Act 20 of 2006]

(vii)   “superannuation scheme” means a scheme whereby provision is made for the payment or granting of benefits by a benefit fund, pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund as defined in section 1 of the Income Tax Act.

[Definition of “superannuation scheme” substituted by section 10 of Act 20 of 1994 and section 130 of Act 24 of 2011 with effect from 10 January 2012]

(3)     Notwithstanding subsection (2), the terms “debt security”, “equity security” and “participatory security” do not include any of the following:

(a)     A life insurance policy or any other policy of insurance;

[Paragraph (a) substituted by section 19(1)(i) of Act 37 of 1996 and by section 49(c) of Act 20 of 2021]

(b)     any ownership or interest in land, other than an interest as mortgagee;

(c)     a share in the share capital of a share block company;

[Paragraph (c) amended by section 13 of Act 136 of 1992]

(d)     any interest of a member of a close corporation which confers on the member a time-sharing interest as defined in section 1 of the Property Time-sharing Control Act, 1983 (Act No. 75 of 1983), on the terms and conditions contained in the association agreement of such close corporation;

(e)     an interest in a superannuation scheme.

(4)     Notwithstanding anything in this section, the term “financial services” does not include-

(a)     the cession, assignment, transfer or other supply of any right to receive payment in relation to any taxable supply where, as a result of any such cession, assignment, transfer or supply, output tax in relation to that taxable supply would not be or become attributable to any tax period for the purposes of section 16 (3); or

[Paragraph (a) substituted by section 24 of Act 27 of 1997]

(b)     ………..

[Paragraph (b) deleted by section 105 of Act 60 of 2008 effective on 21 Oct 2008]

(c)     the transfer of any interest in or right to be paid money that is, or is to be, owing by a share block company under its loan obligation, as defined in section 1 of the Share Blocks Control Act, to any person who is or will be a shareholder of such share block company.

[Paragraph (c) substituted by section 10 of Act 20 of 1994 and effective on 9 July 1993]

[Subsection (4) deleted by section 22 of Act 136 of 1991 and inserted by section 13 of Act 136 of 1992]

3. Determination of “open market value”

(1)     For the purposes of this section-

(a)     “similar supply”, in relation to a supply of goods or services, means any other supply of goods or services that, in respect of the characteristics, quality, quantity, functional components, materials and reputation of the first mentioned goods or services, is the same as, or closely or substantially resembles, that supply of goods or services;

(b)     the open market value of a supply shall include any tax charged under section 7(1)(a) on that supply.

(2)     For the purposes of this Act, the open market value of any supply of goods or services at any date shall be the consideration in money which the supply of those goods or services would generally fetch if supplied in similar circumstances at that date in the Republic, being a supply freely offered and made between persons who are not connected persons.

(3)     Where the open market value of any supply of goods or services cannot be determined under subsection (2), the open market value shall be the consideration in money which a similar supply would generally fetch if supplied in similar circumstances at that date in the Republic, being a supply freely offered and made between persons who are not connected persons.

(4)     Where the open market value of any supply of goods or services cannot be determined in terms of subsection (2) or (3), the open market value shall be determined in accordance with a method approved by the Commissioner which provides a sufficiently objective approximation of the consideration in money which could be obtained for that supply of those goods or services.

(5)     For the purposes of this Act the open market value of any consideration, not being consideration in money, for a supply of goods or services shall be ascertained in the same manner, with any necessary modifications, as the open market value of any supply of goods or services is ascertained under the provisions of this section.

PART I

ADMINISTRATION

4. Administration of Act

(1)     The Commissioner is responsible for carrying out the provisions of this Act.

(2)     Administrative requirements and procedures for purposes of the performance of any duty, power or obligation or the exercise of any right in terms of this Act are, to the extent not regulated in this Act, regulated by the Tax Administration Act.

[Section 4 amended by section 34 of Act 34 of 1997 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

5. Exercise of powers and performance of duties

(1)     The powers conferred and the duties imposed upon the Commissioner by or in terms of the provisions of this Act or any amendment thereof may be exercised or performed by the Commissioner, or by any SARS official.

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

(2)     ……….

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

6. ……….

[Section 6 amended by section 20 of Act 37 of 1996, section 34 of Act 34 of 1997, section 88 of Act 30 of 1998, section 66 of Act 19 of 2001, section 150 of Act 60 of 2001, section 116 of Act 74 of 2002, section 48 of Act 12 of 2003, section 45 of Act 16 of 2004, section 13 of Act 10 of 2006, section 36 of Act 21 of 2006, section 26 of Act 36 of 2007 and repealed by section 271 of Act 28 of 2011 effective on 1 October 2012]

PART II

VALUE-ADDED TAX

7. Imposition of value-added tax

(1)     Subject to the exemptions, exceptions, deductions and adjustments provided for in this Act, there shall be levied and paid for the benefit of the National Revenue Fund a tax, to be known as the value-added tax-

(a)     on the supply by any vendor of goods or services supplied by him on or after the commencement date in the course or furtherance of any enterprise carried on by him;

(b)     on the importation of any goods into the Republic by any person on or after the commencement date; and

(c)     on the supply of any imported services by any person on or after the commencement date,

calculated at the rate of 15 per cent on the value of the supply concerned or the importation, as the case may be.

[Subsection (1) amended by section 23(a) of Act 136 of 1991, by section 14(a) of Act 136 of 1992, by section 23(1)(a) of Act 97 of 1993, by section 33 of Act 37 of 1996 and by section 9(1)(a) of Act 21 of 2018 effective on 1 April 2018]

(2)     Except as otherwise provided in this Act, the tax payable in terms of paragraph (a) of subsection (1) shall be paid by the vendor referred to in that paragraph, the tax payable in terms of paragraph (b) of that subsection shall be paid by the person referred to in that paragraph and the tax payable in terms of paragraph (c) of that subsection shall be paid by the recipient of the imported services.

(3)

(a) Where any goods manufactured in the Republic, being of a class or kind subject to excise duty or environmental levy under Part 2 or 3 of Schedule 1 to the Customs and Excise Act, have been supplied at a price which does not include such excise duty or environmental levy and tax has become payable in respect of the supply in terms of subsection (1)(a), value-­added tax shall be levied and paid at the rate specified in section 7(1) for the benefit of the National Revenue Fund on an amount equal to the amount of such excise duty or environmental levy which, subject to any rebate of such excise duty or environmental levy under the said Act, is paid.

[Paragraph (a) substituted by section 23(b) of Act 136 of 1991, amended by section 14(b) of Act 136 of 1992, by section 23(1)(b) of Act 97 of 1993 and by section 33 of Act 37 of 1996 and substituted by section 94(a) of Act 32 of 2004 and by section 9(1)(b) of Act 21 of 2018 effective on 1 April 2018]

(b)     The tax payable in terms of paragraph (a) shall be paid by the person liable in terms of the Customs and Excise Act for the payment of the said excise duty or environmental levy.

[Paragraph (b) substituted by section 94 of Act 32 of 2004]

(c)     ……….

[Paragraph (c) deleted by section 34 of Act 34 of 1997]

(d)     Subject to this Act, the provisions of the Customs and Excise Act relating to the clearance of goods subject to excise duty or environmental levy and the payment of that excise duty or environmental levy shall mutatis mutandis have effect as if enacted in this Act.

[Paragraph (d) substituted by section 94 of Act 32 of 2004]

(4)     If the Minister makes an announcement in the national annual budget contemplated in section 27(1) of the Public Finance Management, 1999 (Act No. 1 of 1999), that the VAT rate specified in this section is to be altered, that alteration will be effective from a date determined by the Minister in that announcement, and continues to apply for a period of 12 months from that date subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.

[Subsection (4) added by section 84 of Act 15 of 2016 effective on 19 January 2017]

8. Certain supplies of goods or services deemed to be made or not made

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

(a)     goods acquired, manufactured, assembled, constructed or produced by a person are sold, under a power exercisable by another person, in or towards satisfaction of a debt owed by the person whose goods are sold; and

(b)     the person whose goods are sold has not furnished, to the person exercising the power of sale, a statement in writing that the supply of those goods would not be a taxable supply if those goods were sold by the person whose goods are sold, and stating fully the reasons why that supply would not be a taxable supply,

those goods shall be deemed to be supplied in the course of an enterprise.

(2)     For the purposes of this Act, where a person ceases to be a vendor, any goods (other than any goods in respect of the acquisition of which by the vendor a deduction of input tax under section 16(3) was denied in terms of section 17(2) or would have been denied if those sections had been applicable prior to the commencement date) or right capable of assignment, cession or surrender which in either case then forms part of the assets of his enterprise, shall be deemed to be supplied by him in the course of his enterprise immediately before he ceased to be a vendor, unless the enterprise is carried on by another person who in terms of section 53 is deemed to be a vendor:

Provided that-

(i)      where such right is so deemed to be supplied that supply shall be deemed to be a supply of a service;

(ii)     this subsection shall not apply to any such goods or right to the extent that a deduction in terms of section 16(3) has not been allowed or will not be allowed, in respect of the acquisition or use by such vendor, where such vendor on or before 30 June 2000-

(aa)  ceases to be a vendor for the sole reason that the total value of taxable supplies made by that vendor in the preceding period of 12 months has not exceeded R20 000; or

(bb)   ceases to be a vendor in respect of a commercial rental establishment or a residential rental establishment for the sole reason that the total receipts and accruals derived from that commercial rental establishment or residential rental establishment in the preceding period of 12 months have not exceeded R48 000;

(iii)    this subsection shall not apply to fixed property to the extent that a deduction in terms of section 16(3) has not been allowed or will not be allowed in respect of that fixed property or any improvements thereto, where such vendor, on or before 30 June 2000, requests the Commissioner in writing, in the circumstances contemplated in section 24(2), to cancel his registration.

(iv)    this subsection shall not apply to a vendor that is a constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999) or a public authority, respectively, where that vendor (other than a vendor who applied and was registered as a vendor during the period 22 December 2003 to 31 March 2005) ceases to be a vendor as a result of-

(aa)   the substitution of the definition of ‘public authority’ in the Revenue Laws Amendment Act, 2004 or the insertion of paragraph (viii) to the proviso to the definition of ‘enterprise’ in the Revenue Laws Amendment Act, (Act No. 45 of 2003); or

(bb)   the re-classification of that vendor or part of that vendor’s activities within the Schedules to the Public Finance Management Act, 1999 (Act No. 1 of 1999) subsequent to the introduction of the Revenue Laws Amendment Act, 2004;

[Paragraph (iv) added by section 95 of Act 32 of 2004 and amended by section 120 of Act 7 of 2010 effective on 2 November 2010]

(v)     this subsection shall not apply to any such goods or right to the extent that output tax has been paid in terms of section 16(4) read with section 22(3) in respect of such goods or right; and

[Paragraph (v) added by section 120 of Act 7 of 2010 effective on 2 November 2010]

(vi)    this proviso shall not apply to the extent that input tax in respect of such goods or right has been deducted in terms of section 16(3) read with section 22(4).

[Paragraph (vi) added by section 120 of Act 7 of 2010 effective on 2 November 2010]

[Subsection (2) amended by section 15 of Act 136 of 1992 and section 83 of Act 53 of 1999]

(2A)  Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases to be a vendor solely as a consequence of the circumstances contemplated in paragraph (ii) of the proviso to subsection (2), the tax payable to the Commissioner in respect of that deemed supply shall, if the amount thereof is in excess of R3 000, be paid to the Commissioner in so many equal monthly instalments as the Commissioner may allow, the last of which shall not be paid later than 28 February 2001.

[Subsection (2A) inserted by section 83 of Act 53 of 1999]

(2B) Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases on or before 30 June 2005 to be a vendor solely as a consequence of the introduction of proviso (ix) to the definition of ‘enterprise’ in section 1, the tax payable to the Commissioner in respect of that deemed supply shall, if the amount thereof is in excess of R3 000, be paid to the Commissioner in so many equal monthly instalments as the Commissioner may allow.

[Subsection (2B) inserted by section 95 of Act 32 of 2004]

(2C)  ……….

[Subsection (2C) inserted by section 106 of Act 60 of 2008 effective on 1 March 2009 and deleted by section 131 of Act 24 of 2011 effective on 1 March 2012]

(2D)  Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases to be a vendor on or before 30 June 2009 for the sole reason that the total value of taxable supplies made by that vendor in the preceding period of 12 months has not exceeded R1 million, the tax payable in respect of that deemed supply shall be paid in six equal monthly instalments or in so many monthly instalments as the Commissioner may allow.

[Subsection (2D) inserted by section 106 of Act 60 of 2008 effective on 1 March 2009]

(2E)   Where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases to be a vendor for the sole reason that the total value of taxable supplies made by that vendor in the preceding period of 12 months has not exceeded the amount contemplated in section 23(1) or 23(3), the Minister may by regulation prescribe the period in which the tax payable in respect of that deemed supply shall be paid.

[Subsection (2E) inserted by section 91 of Act 17 of 2009]

(2F)   Where a supply is deemed to have been made by a vendor in terms of subsection (2) and the vendor ceases on or after 1 January 2013 to be a vendor solely by reason of the supply of goods or services being exempt under section 12(l) or (m), the value of that deemed supply shall be deemed to be nil.

[Subsection (2F) inserted by section 146 of Act 22 of 2012 effective on 1 January 2013]

(2G)  Subject to section 24(3), where a supply is deemed to have been made by a vendor in terms of subsection (2) and that vendor ceases to be a vendor on 1 April 2014 for the sole reason of the exemption contemplated in section 12(f)(iv), the tax payable in respect of the deemed supply shall be paid in six equal monthly instalments or in so many monthly instalments as the Commissioner may allow.

[Subsection (2G) inserted by section 166 of Act 31 of 2013 effective on 1 April 2013]

(3)     For the purposes of this Act, a credit agreement to which section 121 of the National Credit Act, 2005 (Act No. 34 of 2005), applies shall be deemed not to be a supply of goods or services if the consumer has exercised the right to rescind that agreement in the manner and within the time permitted by that section.

[Subsection (3) substituted by section 172 of Act 34 of 2005 and section 27 of Act 36 of 2007]

(4)

(a)     For the purposes of this Act, any lay-by agreement (as defined in Government Notice No. R 1234 of 13 June 1980, as amended by Government Notice No. R 1814 of 29 August 1980, issued in terms of section 9 of the Sale and Service Matters Act, 1964 (Act No. 25 of 1964)), whereby goods are sold for a consideration not exceeding R10 000 and are reserved by deposit for delivery when the purchase price or a determined portion thereof is paid shall not be deemed to be a supply of goods or services unless and until the goods are delivered to the purchaser.

[Paragraph (a) amended by section 15 of Act 136 of 1992 and substituted by section 83 of Act 53 of 1999]

(b)     Where such agreement is cancelled or terminates for any other reason and the seller retains any amount paid by the purchaser or recovers any amount owing by the purchaser under such agreement, the seller shall for the purposes of this Act be deemed to have supplied a service in respect of such agreement.

(5)     For the purposes of this Act a designated entity shall be deemed to supply services to any public authority or municipality to the extent of any payment made by the public authority or municipality concerned to or on behalf of that designated entity in the course or furtherance of an enterprise carried on by that designated entity.

[Subsection (5) substituted by section 166 of Act 45 of 2003, section 42 of Act 9 of 2006 and section 106 of Act 60 of 2008]

(5A)  For the purposes of section 11(2)(t), a vendor (excluding a designated entity) shall be deemed to supply services to any public authority, municipality or constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), to the extent of any grant paid to or on behalf of that vendor in the course or furtherance of an enterprise carried on by that vendor.

[Subsection (5A) inserted by section 95 of Act 32 of 2004 and substituted by section 42 of Act 9 of 2006 and section 106 of Act 60 of 2008]

(5B)  For the purposes of this Act, a vendor, being an implementing agency in respect of a foreign donor funded project, shall be deemed to supply services to the international donor to the extent of the funding received in terms of an official development assistance agreement.

[Subsection (5B) inserted by section 102(a) of Act 31 of 2005 and substituted by section 68(1)(a) of Act 34 of 2019 effective on 1 April, 2020]

(6)     For the purposes of this Act the transfer of all its assets and liabilities by an administrative unit of a municipality that is separately registered under subsection (2) of section 50, to the vendor intended in subsection (1) of that section, shall be deemed not to be a supply.

[Subsection (6) substituted by section 24 of Act 136 of 1991, amended by section 11 of Act 20 of 1994 and section 67 of Act 19 of 2001 and substituted by section 42 of Act 9 of 2006]

(7)     The disposal of an enterprise as a going concern, or a part thereof which is capable of separate operation, shall for the purposes of this Act be deemed to be a supply of goods made in the course or furtherance of such enterprise.

(8)     For the purposes of this Act, except section 16(3), where a vendor receives any indemnity payment under a contract of insurance or is indemnified under a contract of insurance by the payment of an amount of money to another person, that payment or indemnification, as the case may be, shall, to the extent that it relates to a loss incurred in the course of carrying on an enterprise, be deemed to be consideration received for a supply of services performed on the day of receipt of that payment or on the date of payment to such other person, as the case may be, by that vendor in the course or furtherance of his enterprise:

Provided that this subsection shall not apply-

(i)      in respect of any indemnity payment received or indemnification under a contract of insurance where the supply of services contemplated by that contract is not a supply subject to tax under section 7(1)(a);

(ii)     to the extent that such payment is made to another person as consideration for the supply of goods or services being reinstated under a contract of insurance; or

(iii)    to the extent that the indemnity payment contemplated in this provision is in respect of goods or services to which the vendor receiving the payment was, upon acquisition of such goods or services, denied a deduction of input tax under section 17(2).

[Subsection (8) substituted by section 15(1)(e) of Act 136 of 1992 and amended by section 11(b) of Act 20 of 1994 and by section 48(1)(a) of Act 17 of 2023 with effect from 1 January, 2024]

(8A)   For the purposes of paragraph (ii) of the proviso to section 8(8) and sections 16(2) and 16(3) and subject to the provisions of section 54(2)-

(a)     the person supplying the goods or services being reinstated under a contract of insurance is deemed to make a supply to each person that is liable to pay any part of the consideration in respect thereof; and

(b)     notwithstanding paragraph (i) of the proviso to section 20(1), if the person supplying the reinstated goods or services in paragraph (a) is a vendor, that vendor must issue a tax invoice to each person that is liable to make a payment of consideration in respect thereof and such tax invoice must reflect the consideration paid or payable by each person.

[Subsection (8A) added by section 48(1)(b) of Act 17 of 2023 with effect from 1 January, 2024]

(9)     For the purposes of this Act, where any vendor in carrying on an enterprise in the Republic consigns or delivers goods to an address outside the Republic or provides any service to or for the purposes of his branch or main business outside the Republic in respect of which the provisions of paragraph (ii) of the proviso to the definition of ‘enterprise’ in section 1 are applicable, the vendor shall be deemed to supply such goods or service in the course or furtherance of his enterprise.

[Subsection (9) substituted by section 24 of Act 97 of 1993 and section 166 of Act 45 of 2003]

(10)   For the purposes of this Act-

(a)     where any goods are repossessed; or

(b)     where there is a surrender of goods,

under an instalment credit agreement, a supply of such goods shall be deemed to be made by the debtor under such instalment credit agreement to the person exercising the person’s right or obligation of possession under such instalment credit agreement, and where such debtor is a vendor the supply shall be deemed to be made in the course or furtherance of the vendor’s enterprise unless such goods did not form part of the assets held or used by the vendor for the purposes of the vendor’s enterprise.

[Subsection (10) substituted by section 166 of Act 31 of 2013 effective on 1 April 2014]

(11)   For the purposes of this Act, a supply of the use or right to use or the grant of permission to use any goods (whether with or without a driver, pilot, crew or operator) under any rental agreement, instalment credit agreement, charter party, agreement for charter or any other agreement under which such use or permission to use is granted, shall be deemed to be a supply of goods.

(12)   ……….

[Subsection (12) deleted by section 15 of Act 136 of 1992]

(13)   For the purposes of this Act, where any person bets an amount on the outcome of a race or on any other event or occurrence, the person with whom the bet is placed shall be deemed to supply a service to such first-mentioned person.

(13A)For the purposes of this Act, except section 16(3), where any vendor who makes taxable supplies of services contemplated in subsection (13) of this section, receives any amount paid by any other vendor as a prize or winnings in consequence of a supply of such services made by the last-mentioned vendor to the first-mentioned vendor, the first-mentioned vendor shall be deemed to supply a service to the last-mentioned vendor.

[Subsection (13A) inserted by section 20 of Act 46 of 1996]

(14)   For the purposes of this Act-

(a)     where any goods are supplied by a vendor to a person otherwise than in the circumstances contemplated in paragraph 2(b) of the Seventh Schedule to the Income Tax Act, and a deduction under section 16(3) in respect of the acquisition by the vendor of those goods was denied in terms of section 17(2) or would have been denied if section 7 of this Act had been applicable prior to the commencement date, the vendor shall be deemed to have supplied the goods otherwise than in the course or furtherance of his enterprise;

(b)     where any input tax is allowed in terms of section 18(9) in respect of a game viewing vehicle or a hearse as contemplated in paragraph (e) or (f) of the definition of ‘motor car’ in section 1, the subsequent supply of that game viewing vehicle or hearse shall be deemed to be supplied in the course of the vendor’s enterprise.

[Subsection (14) substituted by section 24 of Act 136 of 1991, section 24 of Act 97 of 1993 and section 95 of Act 32 of 2004]

(14A) For the purposes of this Act, where input tax has been allowed on the conversion of a game viewing vehicle or a hearse, as contemplated in paragraph (e) or (f) of the definition of ‘motor car’ in section 1 and that game viewing vehicle or hearse is subsequently applied for purposes other than those purposes as contemplated in paragraph (e) or (f) of the definition of ‘motor car’ in section 1, a supply of that game viewing vehicle or hearse shall be deemed to take place.

[Subsection (14A) inserted by section 95 of Act 32 of 2004]

(15)   For the purposes of this Act, where a single supply of goods or services or of goods and services would, if separate considerations had been payable, have been charged with tax in part at the rate applicable under section 11, each part of the supply concerned shall be deemed to be a separate supply:     Provided that this subsection does not apply to a single charge as contemplated in paragraph (a) of the proviso to the definition of ‘municipal rate’ in section 1.

[Subsection (15) amended by section 42 of Act 9 of 2006]

(16)

(a)     The supply by a vendor-

(i)      of any goods (other than fixed property acquired prior to the commencement date by a vendor who is a natural person if such property was used by him mainly as his private residence and no deduction of any amount has been made by him under section 16(3) in respect of such property); or

(ii)     of services, where such goods or services were acquired or imported by him partly for the purpose of consumption, use or supply in the course of making taxable supplies (including supplies which would have been taxable supplies if section 7 of this Act had been applicable prior to the commencement date) and were held or utilized by him partly for the said purpose immediately prior to the supply by him of such goods or services, shall be deemed to be made wholly in the course or furtherance of his enterprise.

(b)     The supply by any vendor of fixed property acquired prior to the commencement date by such vendor, being a natural person, shall be deemed to be made otherwise than in the course or furtherance of his enterprise provided-

(i)      such property was used by him prior to such supply mainly as his private residence; and

(ii)   no deduction of any amount has been made by him under section 16(3) in respect of such property.

[Subsection (16) added by section 24 of Act 136 of 1991 and substituted by section 15 of Act 136 of 1992]

(17)

(a)     For the purposes of this Act, where, together with the supply of a share referred to in the definition of “fixed property” in section 1, any amount of the loan obligation, as defined in section 1 of the Share Blocks Control Act, of the share block company is allocated as contemplated in section 14 of that Act, or any amount of the loan obligation thus allocated is delegated, or any interest in or right to be paid money that is, or is to be, owing by the share block company under its loan obligation is transferred to any person who is or will be a shareholder of such share block company, such allocation, delegation or transfer, as the case may be, shall be deemed to form part of the supply of such share.

[Paragraph (a) substituted by section 11 of Act 20 of 1994]

(b)     For the purposes of this Act, where any allocation, delegation or transfer as contemplated in paragraph (a) is made without the supply of a share referred to in the definition of “fixed property” in section 1 and otherwise than in the circumstances contemplated in that paragraph, such allocation, delegation or transfer shall be deemed to constitute the supply of a share referred to in the said definition.

[Subsection (17) added by section 15 of Act 136 of 1992]

(18)   For the purposes of the definition of “input tax” in section 1 and section 18(4) and (5), as applicable to any share block company, any taxable supply of a share referred to in subsection (17) made on or after a date fixed by the Minister by notice in the Gazette by a share block developer where such share is a share in a share block scheme in respect of which that developer is a share block developer as contemplated in section 1 of the Share Blocks Control Act, shall be deemed to have been made by the share block company in relation to which that developer is a share block developer, to the extent that-

(a)     the supply of such share to such developer was not a taxable supply by such company to such developer; or

(b)     such developer was not or will not in terms of section 16(3) be entitled to make a deduction of input tax referred to in paragraph (b) of the definition of “input tax” in section 1 in respect of the supply of such share to him.

[Subsection (18) added by section 15 of Act 136 of 1992, substituted by section 24 of Act 97 of 1993 and amended by section 11 of Act 20 of 1994]

(19)   For the purposes of this Act, where any supply of-

(a)     goods consisting of immovable property is made by a share block company-

(i)      in the circumstances referred to in Item 8 of Schedule 1 to the Share Blocks Control Act; or

(ii)     as a result of a sale by that share block company of that immovable property to a person who held a right of exclusive use of that immovable property, which right was conferred by reason of the ownership of a share by that person in that share block company; or

(b)     services comprising the waiving of rights against a share block company is made to that share block company-

(i)      in the circumstances referred to in Item 8 of Schedule 1 to the Share Blocks Control Act; or

(ii)   by a person as part of a sale contemplated in paragraph (a)(ii),

such supply shall be deemed to have been made in the course or furtherance of an enterprise.

[Words following subparagraph (ii) substituted by section 166 of Act 31 of 2013 effective on 1 April 2014]

[Subsection (19) added by section 11 of Act 20 of 1994 and substituted by section 146 of Act 22 of 2012 effective on 1 January 2013]

(20)   For the purposes of this Act, where an importation of goods is deemed to have been made by an agent in the circumstances contemplated in section 54(2A)(b), such agent shall be deemed to make a supply of goods to the recipient of the supply by the principal, as contemplated in subparagraph (iii) of that section.

[Subsection (20) added by section 25 of Act 27 of 1997]

(21)   For the purposes of this Act, compensation or any other payment, other than an amount contemplated in section 12(a), received by a vendor in consequence of the expropriation of fixed property, is deemed to be received in respect of a supply of goods made in the course or furtherance of an enterprise unless that fixed property forms no part of the assets held or used by the vendor for the purposes of an enterprise.

[Subsection (21) added by section 151 of Act 60 of 2001 and substituted by section 95 of Act 32 of 2004]

(22)   For the purposes of this Act, where two or more public higher education institutions or one or more subdivisions of such institutions are merged with or incorporated into a single public higher education institution in terms of a direction by the Minister of Education in terms of section 23 or 24 of the Higher Education Act, 1997 (Act No. 101 of 1997), such institutions or such subdivisions thereof prior to the merger or incorporation and the newly merged or incorporated single institutions shall be deemed to be one and the same institution.

[Subsection (22) added by section 166 of Act 45 of 2003]

(23)   For the purposes of this Act a vendor shall be deemed to supply services to any public authority or municipality to the extent of any payment made to or on behalf of that vendor in terms of a national housing programme contemplated in the Housing Act, 1997 (Act No. 107 of 1997).

[Subsection (23) added by section 166 of Act 45 of 2003, substituted by section 42 of Act 9 of 2006 and section 120 of Act 7 of 2010, deleted by section 129 of Act 25 of 2015 and re-inserted by section 78 of Act 17 of 2017 effective on 1 April 2017]

(24)   For the purposes of this Act, a vendor, being a customs controlled area enterprise or an SEZ operator, shall be deemed to supply goods in the course or furtherance of an enterprise where movable goods are temporarily removed from a place in a customs controlled area to a place outside the customs controlled area, situated in the Republic, if those goods are not returned to the customs controlled area within 30 days of its removal, or within a period approved in writing by the Controller: Provided that this subsection shall not apply where those movable goods are supplied by the customs controlled area enterprise or SEZ operator, prior to the expiry of the relevant prescribed time period: Provided further that this subsection shall not apply to-

(a)     goods that are deemed to have been imported under paragraph (i) of the proviso to section 13(1); or

(b) goods to which section 18(10) previously applied.

[Subsection (24) added by section 102 of Act 31 of 2005 and substituted by section 79 of Act 20 of 2006, section 106 of Act 60 of 2008, section 146 of Act 22 of 2012 and section 24 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

(25)   For the purposes of this Act, where any goods or services are supplied by a vendor to another vendor, those vendors must for the purposes of that supply or subsequent supplies of those goods or services, be deemed to be one and the same person provided the provisions of section 42, 44, 45 or 47 of the Income Tax Act are complied with: Provided that this subsection shall not apply to a supply contemplated in section 42 or 45 of the Income Tax Act, unless-

(i)      that supply is of an enterprise or part of an enterprise which is capable of separate operation, where the supplier and recipient have agreed in writing that such enterprise or part, as the case may be, is disposed of as a going concern;

[Paragraph (i) amended by section 68(1)(b) of Act 34 of 2019 effective on 1 April, 2020]

(ii)     the enterprise or part, as the case may be, disposed of as a going concern has been carried on in, on or in relation to goods or services applied mainly for purposes of such enterprise or part, as the case may be, and partly for other purposes, such goods or services shall, where disposed of to such recipient, for the purposes of this paragraph be deemed to form part of such enterprise or part, as the case may be, notwithstanding the provisions of paragraph (v) of the proviso to the definition of “enterprise” in section 1; or

[Paragraph (ii) amended by section 68(1)(b) of Act 34 of 2019 effective on 1 April, 2020]

(iii)    the supply is of fixed property and the supplier and the recipient have agreed in writing that, immediately after the supply, the supplier will lease the fixed property from the recipient.

[Subsection (25) added by section 102(b) of Act 31 of 2005 and substituted by section 91(1)(b) of Act 17 of 2009 effective on the date of promulgation of that Act, 30 September, 2009 and applicable in respect of any supply made on or after that date. Paragraph (iii) added by section 68(1)(b) of Act 34 of 2019 effective on 1 April, 2020]

Provided further that this subsection shall not apply to a supply as contemplated in section 42 or 45 of the Income Tax Act, where such supplier and recipient have agreed in writing that the provisions of subsection (7) and section 11(1)(e) of this Act shall apply.

[Subsection (25) added by section 102(b) of Act 31 of 2005, substituted by section 91(1)(b) of Act 17 of 2009 and amended by section 62(1) of Act 23 of 2020 effective on 1 April, 2021]

(26)   The supply of goods or services under any warranty agreement shall, for the purposes of section 11(2)(v), be deemed to be a supply of services.

[Subsection (26) added by section 102 of Act 31 of 2005]

(27)   For the purposes of this Act, where any amount received in respect of a taxable supply of goods or services at the rate specified in section 7(1) exceeds the consideration charged for that supply, and such excess amount has not been refunded within four months of receipt thereof, that excess amount shall be deemed to be consideration for a supply of services performed by the vendor in the course or furtherance of that vendor’s enterprise on the last day of the tax period during which that four month period ends.

[Subsection (27) added by section 79(b) of Act 20 of 2006 and substituted by section 27(1)(b) of Act 36 of 2007 and by section 10(1) of Act 21 of 2018 deemed effective on 1 April, 2018]

(28)   Where a municipality transfers any assets, liabilities, rights and obligations to another municipality pursuant to the merger, creation, adjustment or disestablishment of municipalities as a result of any municipal boundary change as envisaged under the Local Government: Municipal Structures Act, 1998 (Act 117 of 1998)—

(a)     the transferring municipality and the recipient municipality shall be regarded as being one and the same person if such municipalities are merged into a single municipality; and

(b)     the transferring municipality shall not be deemed to have made a supply to the recipient municipality if both municipalities continue to exist after such municipal boundary change.

[Subsection (28) added by section 78(1)(b) of Act 17 of 2017 effective on 1 April, 2018]

(29)   For the purposes of this Act, a supply of leasehold improvements by a vendor, being a lessee, shall be deemed to be a supply of goods in the course or furtherance of the lessee’s enterprise to the extent that the leasehold improvements are made for no consideration: Provided that this subsection shall not apply where such leasehold improvements are wholly for consumption, use or supply in the course of making other than taxable supplies by the lessee.

[Subsection (29) added by section 78(1)(b) of Act 17 of 2017 effective on 1 April, 2018]

8A.      Sharia compliant financing arrangements

(1)     For the purposes of this Act, in the case of any murabaha as defined in section 24JA(1) of the Income Tax Act–

(a)     the financier shall be deemed not to have acquired or supplied goods under the sharia arrangement;

[Paragraph (a) substituted by section 132 of Act 24 of 2011 effective on 1 January 2013]

(b)     the client shall be deemed to have acquired the goods-

(i)      from the seller for consideration equal to the amount paid by the financier to the seller; and

(ii)     at such time as the supply was made by the seller by virtue of the transaction between the seller and the financier; and

[Paragraph (b) substituted by section 132 of Act 24 of 2011 effective on 1 January 2013]

(c)     any premium paid or payable to the financier by the client shall be deemed to be consideration in respect of a financial service supplied by the financier as contemplated in section 2(1)f): Provided that this paragraph shall not apply to the extent to which the consideration constitutes any fee, commission or similar charge.

[Paragraph (c) substituted by section 132 of Act 24 of 2011 effective on 1 January 2013]

(2)     For the purposes of this Act, in the case of any diminishing musharaka as defined in section 24JA(1) of the Income Tax Act–

(a)     the bank shall be deemed not to have acquired or supplied goods under the sharia arrangement;

(b)

(i)      where the bank and the client jointly acquire goods, the client shall be deemed to have acquired the bank’s interest in the goods-

(aa)   for an amount equal to the amount payable by the bank in respect of its interest in the goods; and

(bb)   at the time that the seller of the goods was divested of any interest in the goods by virtue of the transaction between the seller and the bank; or

(ii)     where the bank acquires an interest in the goods from the client, the client shall be deemed not to have supplied an interest in the goods to the bank; and

(c)     any amount contemplated in section 24JA(6)(a) of the Income Tax Act paid or payable to the bank by the client shall be deemed to be consideration in respect of an exempt financial service supplied by the bank as contemplated in section 2(1)(f): Provided that this paragraph shall not apply to the extent to which the consideration constitutes any fee, commission or similar charge.

[Paragraph (c) amended by section 69 of Act 34 of 2019]

9. Time of supply

(1)     For the purposes of this Act a supply of goods or services shall, except as otherwise provided in this Act, be deemed to take place at the time an invoice is issued by the supplier or the recipient in respect of that supply or the time any payment of consideration is received by the supplier in respect of that supply, whichever time is earlier.

(2)     A supply of goods or services shall be deemed to take place-

(a)     where the supplier and the recipient are connected persons-

(i)      in the case of a supply of goods which are to be removed, at the time of the removal; and

(ii)     in the case of a supply of goods which are not to be removed, at the time when they are made available to the recipient; and

(iii)  in the case of a supply of services, at the time the services are performed:

Provided that this paragraph shall not apply in any case where an invoice is issued in respect of that supply or any payment is made in respect of that supply on or before-

(aa)   the day on which the return is furnished for the tax period during which that supply would, but for this proviso, have been made; or

(bb)   the last day prescribed by this Act for furnishing the return for the tax period during which that supply would, but for this proviso, have been made;

: Provided further that this paragraph shall not apply where the whole of the consideration or part thereof for such supply of goods or services cannot be determined at the time the goods are removed or made available or at the time the services are performed, and the recipient would have been entitled under section 16(3) at that time to make a deduction of the full amount of tax in respect of that supply, in which case the provisions of subsection (1) shall apply;

[Further proviso to paragraph (a) added by section 130 of Act 25 of 2015 effective on 1 April 2016]

(b)     where that supply is a supply to which section 8(3) refers, on the day after the last day of the period during which the recipient may exercise the right under section 121 of the National Credit Act, 2005 (Act No. 34 of 2005), to rescind the agreement;

[Paragraph (b) substituted by section 172 of Act 34 of 2005 and section 28 of Act 36 of 2007]

(c)     where that supply is a supply to which section 8(4) refers, at the time at which the goods are delivered to the recipient: Provided that in any case in which a supply of services is deemed to take place under section 8(4)(b), that supply of services shall be deemed to take place at the time that the agreement of sale is cancelled or terminates;

(d)     where the supply is for a consideration in money received by the supplier by means of any machine, meter or other device operated by a coin, paper currency, token or by any other means-

(i)      in the case of such supplier, at the time any such coin, paper currency or token is taken from that machine, meter or other device by or on behalf of the supplier or an amount is received by the supplier by other means; and

(ii)     in the case of the recipient of such supply at the time the coin, paper currency or token is inserted into that machine, meter or other device by or on behalf of the recipient or when payment is tendered through other means;

[Paragraph (d) substituted by section 27 of Act 8 of 2010 effective on 2 November 2010]

(e)     where the provisions of section 8(9) are applicable in respect of the consignment or delivery of goods at an address outside the Republic or the provision of any service by a vendor to his branch or main branch at the time the goods are consigned or delivered to such branch or the service is performed, as the case may be.

[Paragraph (e) substituted by section 25 of Act 136 of 1991 and section 167 of Act 45 of 2003]

(3)     Notwithstanding anything in subsection (1) or (2) of this section-

(a)     where goods are supplied under any rental agreement or where services are supplied under any agreement or law which provides for periodic payments, they shall be deemed to be successively supplied for successive parts of the period of the agreement or as determined by such law, and each of the successive supplies shall be deemed to take place when a payment becomes due or is received, whichever is the earlier;

(b)     where and to the extent that-

(i)      goods are supplied progressively or periodically under any agreement or law which provides for the consideration for that supply to be paid in instalments or periodically and in relation to the progressive or periodic supply of those goods; or

(ii)     goods or services supplied directly in the construction, repair, improvement, erection, manufacture, assembly or alteration of goods are supplied under any agreement or law which provides for the consideration for that supply to become due and payable in instalments or periodically in relation to the progressive nature of the work,

those goods or services shall be deemed to be successively supplied, and each such successive supply shall be deemed to take place whenever any payment in respect of any supply becomes due, is received, or any invoice relating only to that payment is issued, whichever is the earliest;

(c)     where goods are supplied under an instalment credit agreement, that supply shall, subject to the provisions of subsection (2)(b), be deemed to take place at the time the goods are delivered or the time any payment of consideration is received by the supplier in respect of that supply, whichever time is earlier;

[Paragraph (c) substituted by section 25 of Act 136 of 1991]

(d)     where goods consisting of fixed property or any real right therein are supplied under a sale, that supply shall be deemed to take place-

(i)     ……….

[Subparagraph (i) deleted by section 25 of Act 97 of 1993]

(ii)     where registration of transfer of the goods is effected in a deeds registry, on the date of such registration; or

(iii)    on the date on which any payment is made in respect of the consideration for such supply,

whichever date is earlier;

[Paragraph (d) amended by section 25 of Act 97 of 1993]

(e)     where any supply of a service is deemed to be made as contemplated in section 8(13), the service shall be deemed to be supplied to the extent that payment of any amount of the bet is made, and each such supply shall be deemed to take place whenever any payment in respect of such supply is received by the supplier;

(f)     where any supply of a service is deemed to be made as contemplated in section 8(13A), the supply shall be deemed to take place whenever any amount is paid out as a prize or winnings by the supplier of the services contemplated in section 8(13).

[Paragraph (f) added by section 21 of Act 46 of 1996]

(4)     Subject to the provisions of subsections (2)(a) and (6)-

(a)     where goods are supplied under an agreement, other than an instalment credit agreement or rental agreement, and the goods or part of them are appropriated under that agreement by the recipient in circumstances where the whole of the consideration is not determined at the time they are appropriated, that supply shall be deemed to take place when and to the extent that any payment in terms of the agreement is due or is received or an invoice relating to the supply is issued by the supplier or the recipient, whichever is the earliest; and

(b)     where services are supplied under an agreement and the consideration for such services supplied is not determined at the time that such services are rendered or performed, that supply shall be deemed to take place when and to the extent that any payment in terms of the agreement is due or is received or an invoice relating to the supply is issued by the supplier or the recipient, whichever is the earliest.

[Subsection (4) substituted by section 167 of Act 31 of 2013 effective on 1 April 2014]

(5)     Where any goods or any right capable of assignment, cession or surrender is deemed to be supplied by a vendor in the course of his enterprise as contemplated in section 8(2) the time of supply shall be deemed to be the time contemplated in that section.

(6)     Where any supply of goods or services is deemed to be made as contemplated in section 18(1) the time of supply shall be deemed to be the time that the goods or services are applied as contemplated in the said subsection.

(7)     The supply of goods or services which is deemed to be made by any vendor as contemplated in section 18(3) shall be deemed to take place at the end of the month in respect of which the cash equivalent of the benefit or advantage concerned, as determined under the Seventh Schedule to the Income Tax Act, or a portion of such cash equivalent, is in terms of the Fourth Schedule to that Act required to be included in the remuneration of the employee or office holder to whom the benefit or advantage is granted or, where such cash equivalent is not required to be included in the remuneration of the employee or office holder in terms of the said Fourth Schedule, on the last day of the year of assessment in terms of the said Act, as applicable to that employee or office holder, during which the benefit or advantage was granted to him.

(8)     Where a supply of goods is deemed by section 8(10) to be made by a debtor, the time of that supply shall be deemed to be the day on which the goods are repossessed or surrendered or, where the debtor may under any law be reinstated in the debtor’s rights and obligations under such agreement, the day after the last day of any period during which the debtor may under such law be so reinstated.

[Subsection (8) substituted by section 167 of Act 31 of 2013 effective on 1 April 2014]

(9)     Where any supply of goods is deemed to be made as contemplated in section 8(20), that supply shall be deemed to take place at the time the tax payable on importation of the goods is paid by the agent.

[Subsection (9) added by section 26 of Act 27 of 1997]

(10)   Where any supply of a game viewing vehicle or a hearse is deemed to be made as contemplated in section 8(14)(b) or 8(14A) the time of supply shall be deemed to be the time that the game viewing vehicle or hearse is supplied as contemplated in those sections.

[Subsection (10) added by section 96 of Act 32 of 2004]

(11)   Where any supply of goods is deemed to be made as contemplated in section 8(24), that supply shall be deemed to take place on the last day of the applicable period contemplated in section 8(24).

[Subsection (11) added by section 103 of Act 31 of 2005]

(12) Where any supply of goods is deemed to be made as contemplated in section 8(29), that supply shall be deemed to take place at the time the leasehold improvements are contemplated.

[Subsection (12) added by section 79(1) of Act 17 of 2017 effective on 1 April 2018]

(13)   Where any supply of goods or services is deemed to be made as contemplated in section 18D(2) the time of supply shall be deemed to be the date within the tax period in which the agreement for the letting and hiring of the accommodation in a dwelling comes into effect or in which the dwelling is occupied, whichever comes first.

[Subsection (13) inserted by section 50(1) of Act 20 of 2021 and substituted by section 28(1) of Act 20 of 2022 deemed effective on 1 April, 2022]

10. Value of supply of goods or services

(1)     For the purposes of this Act the following provisions of this section shall apply for determining the value of any supply of goods or services.

(2)     The value to be placed on any supply of goods or services shall, save as is otherwise provided in this section, be the amount of the consideration for such supply, as determined in accordance with the provisions of subsection (3), less so much of such amount as represents tax: Provided that-

(i)      there shall be excluded from such consideration the value of any postage stamp as defined in section 1 of the Post Office Act, 1958 (Act No. 44 of 1958), when used in the payment of consideration for any service supplied by the postal company as defined in section 1 of the Post Office Act, 1958;

[Paragraph (i) substituted by section 84 of Act 53 of 1999]

(ii)     where the portion of the amount of the said consideration which represents tax is not accounted for separately by the vendor, the said portion shall be deemed to be an amount equal to the tax fraction of that consideration.

[Paragraph (ii) substituted by section 82 of Act 8 of 2007]

[Subsection (2) amended by section 82 of Act 8 of 2007]

(3)     For the purposes of this Act the amount of any consideration referred to in this section shall be-

(a)     to the extent that such consideration is a consideration in money, the amount of the money; and

(b)     to the extent that such consideration is not a consideration in money, the open market value of that consideration.

[Subsection (3) amended by section 82 of Act 8 of 2007]

(4)     Where-

(a)     a supply is made by a person for no consideration or for a consideration in money which is less than the open market value of the supply or the consideration cannot be determined at the time of supply;

[Paragraph (a) substituted by section 21 of Act 37 of 1996 and section 131 of Act 25 of 2015 effective on 1 April 2016]

(b)     the supplier and recipient are connected persons in relation to each other; and

(c)     if a consideration for the supply equal to the open market value of the supply had been paid by the recipient, he would not have been entitled under section 16(3) to make a deduction of the full amount of tax in respect of that supply,

[Paragraph (c) substituted by section 26 of Act 97 of 1993]

the consideration in money for the supply shall be deemed to be the open market value of the supply: Provided that this subsection shall not apply to the supply of a benefit or advantage of employment contemplated in section 18(3).

(4A) For the purposes of this Act, where any share in a share block company is supplied, the consideration in money for that supply shall include the amount of any allocation, delegation or transfer referred to in section 8(17).

[Subsection (4A) inserted by section 16 of Act 136 of 1992]

(5)     Where goods or services are deemed to be supplied by a vendor in terms of section 8(2) or (9), the supply shall be deemed to be made for a consideration in money equal to the lesser of-

(a)     the cost to the vendor of the acquisition, manufacture, assembly, construction or production of such goods or services, including-

(i)      any tax charged in respect of the supply to the vendor of such goods or services or of any components, materials or services utilized by him in such manufacture, assembly, construction or production;

(ii)     where such goods or any right referred to in section 8(2), when held by the vendor, constituted trading stock as defined in section 1 of the Income Tax Act, any further costs (including tax) incurred by him in respect of such goods or right as contemplated in section 22(3)(a) of that Act;

(iii)    any costs (including tax) incurred by the vendor in respect of the transportation or delivery of such goods or the provision of such services in respect of such goods that are consigned or delivered or the provision of such services as contemplated in section 8(9); and

[Subparagraph (iii) substituted by section 168 of Act 45 of 2003]

(iv)    where such goods or services were acquired under a supply in respect of which the consideration in money was in terms of section 10(4) deemed to be the open market value of the supply or would in terms of that section have been deemed to be the open market value of the supply were it not for the fact that the recipient would have been entitled under section 16(3) to make a deduction of the full amount of tax in respect of that supply, such open market value to the extent that it exceeds the consideration in money for that supply; or

[Subparagraph (iv) added by section 26 of Act 97 of 1993]

(b)     the open market value of such supply.

(5A)  ……….

[Subsection (5A) inserted by section 107 of Act 60 of 2008 effective on 1 March 2009, substituted by section 122 of Act 7 of 2010 effective on 2 November 2010 and deleted by section 133 of Act 24 of 2011 effective on 1 March 2012]

(6)     For the purposes of this Act, where goods are supplied under an instalment credit agreement, the consideration in money for the supply shall be deemed to be the cash value of that supply.

(7)     Where goods or services are deemed by section 18(1) or 18B(3) to be supplied by a vendor, the supply shall, subject to the provisions of subsection (8), be deemed to be made for a consideration in money equal to the open market value of such supply.

[Subsection (7) substituted by section 133 of Act 24 of 2011 with effect from 10 January 2012]

(8)     Where any repairs, maintenance or insurance in respect of a motor vehicle is deemed to be supplied by a vendor by section 18(1), such supply shall be deemed to be made for a consideration in money equal to the cost (including tax) to such vendor of acquiring such repairs, maintenance or insurance: Provided that where such vendor does not maintain accurate data for the purposes of calculating such consideration in money, such supply shall be deemed to be made for a consideration in money equal to the amount determined in the manner prescribed by the Minister in the Gazette for the category of motor vehicle concerned.

[Subsection (8) amended by section 26 of Act 136 of 1991]

(9)     Where goods or services are deemed by section 18(2) to be supplied by a vendor, the supply shall be deemed to be made for a consideration in money determined in accordance with the formula

A x (B – C),

in which formula-

“A” represents the lesser of-

(i)     

(aa)  the adjusted cost (including any tax forming part of such adjusted cost) to the vendor of the acquisition, manufacture, assembly, construction or production of those goods or services: Provided that where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of section 10(4) deemed to be the open market value of the supply or would in terms of that section have been deemed to be the open market value of the supply were it not for the fact that the recipient would have been entitled under section 16(3) to make a deduction of the full amount of tax in respect of that supply, the adjusted cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply; or

[Item (aa) substituted by section 26 of Act 97 of 1993 and section 168 of Act 45 of 2003]

(bb)   where the vendor was at some time after the acquisition of such goods or services deemed by section 18(4) to have been supplied with such goods or services, the amount which was represented by “B” in the formula contemplated in section 18(4) when such goods or services were deemed to be supplied to the vendor; or

(cc)   where the vendor was at some time after the acquisition of the goods or services required to make an adjustment contemplated in section 18(2) or (5), the amounts then represented by “A” in the said formula or by “B” in the formula contemplated in section 18(5) respectively, in the most recent adjustment made under section 18(2) or (5) by the vendor prior to such deemed supply of goods or services; and

(ii)     the open market value of the supply of those goods or services at the time any reduction in the extent of the consumption or use of the goods is deemed by section 18(6) to take place;

“B”   represents the percentage that the use or application of the goods or services for the purposes of making taxable supplies was of the total use or application of such goods or services determined under section 17(1), section 18(4) or (5) or this subsection, whichever was applicable in the period immediately preceding the 12 month period contemplated in “C”; and

“C”   represents the percentage that, during the 12 month period during which the decrease in use or application of the goods or services is deemed to take place, the use or application of the goods or services for the purposes of making taxable supplies (in respect of which, if such goods or services had been acquired at the time of such use or application, a deduction of input tax would not have been denied in terms of section 17(2)(a)), was of the total use or application of the goods: Provided that where the percentage contemplated in “B” does not exceed the said percentage by more than 10 per cent of the total use or application, the said percentage shall be deemed to be the percentage determined in “B”.

[Definition of “C” substituted by section 26 of Act 136 of 1991 and amended by section 27 of Act 27 of 1997]

(10)   Where domestic goods and services are supplied at an all-inclusive charge in any enterprise supplying commercial accommodation for an unbroken period exceeding 28 days, the consideration in money is deemed to be 60 per cent of the all-inclusive charge.

[Subsection (10) amended by section 68 of Act 19 of 2001 and substituted by section 152 of Act 60 of 2001]

(11)   Where a service is under section 8(4)(b) deemed to be supplied, the consideration in money for the supply shall be deemed to be an amount equal to the amount retained or recovered as contemplated in that section.

(12)   Where any supply of goods is a supply which would, but for the proviso to section 11(1), be charged with tax at the rate of zero per cent, the consideration in money for that supply shall be deemed to be an amount equal to the purchase price of those goods to the supplier: Provided that in any case where the deduction of input tax referred to in that proviso has been made by any other person (where that supplier and that other person are connected persons), the consideration in money for that supply shall be deemed to be an amount equal to the greater of the purchase price of those goods to that supplier and the purchase price of those goods to that other person: Provided further that for the purposes of this subsection, the purchase price of any goods shall not be reduced by any amount of input tax deducted under section 16(3) by the supplier or, as the case may be, any other person where the supplier and that other person are connected persons.

(13)   Where goods or services are deemed to be supplied by a vendor under section 18(3), the consideration in money for the supply shall be deemed to be an amount equal to the cash equivalent of the benefit or advantage granted to the employee or office holder, as contemplated in section 9(7): Provided that where such benefit or advantage consists of the right to use a motor vehicle as contemplated in paragraph 2(b) of the Seventh Schedule to the Income Tax Act, the consideration in money for the supply shall be deemed to be the amount determined in the manner prescribed by the Minister in the Gazette for the category of motor vehicle used.

[Subsection (13) amended by section 26 of Act 136 of 1991 and section 16 of Act 136 of 1992]

(14)   Where services are or are deemed by section 8(5) to be supplied to any public authority or municipality by any vendor the consideration in money for such supply shall be deemed to be the amount of any payment made from time to time by the public authority or municipality concerned to or on behalf of the vendor as contemplated in the said section.

[Subsection (14) substituted by section 43 of Act 9 of 2006]

(15)   ……….

[Subsection (15) substituted by section 26 of Act 136 of 1991 and deleted by section 43 of Act 9 of 2006]

(16)   Where a supply of goods is deemed by section 8(10) to be made by a debtor, the consideration in money for that supply shall be deemed to be an amount equal to the balance of the cash value of the goods (being the cash value thereof applied under subsection (6) in respect of the supply of the goods to the debtor under the said agreement) which has not been recovered on the date on which the supply of the goods by the debtor is deemed by section 9(8) to be made: Provided that the said balance shall be deemed to be the amount remaining after deducting from the cash value so much of the sum of the payments made by the debtor under the said agreement as, on the basis of an apportionment in accordance with the rights and obligations of the parties to the said instalment credit agreement, may properly be regarded as having been made in respect of the cash value.

[Words preceding the proviso substituted by section 168 of Act 31 of 2013 effective on 1 April 2014]

(17)   Where a service is deemed by section 8(13) to be supplied to any person, the consideration in money for such supply shall be deemed to be the amount that is received in respect of the bet.

(17A) Where a service is deemed by section 8(13A) to be supplied to any vendor, the consideration in money for such supply shall be deemed to be the amount that is received as a prize or winnings.

[Subsection (17A) inserted by section 22 of Act 46 of 1996]

(18)   Where a right to receive goods or services to the extent of a monetary value stated on any token, voucher or stamp (other than a postage stamp as defined in section 1 of the Postal Services Act, 1998, and any token, voucher or stamp contemplated in subsection (19) is granted for a consideration in money, the supply of such token, voucher or stamp is disregarded for the purposes of this Act, except to the extent (if any) that such consideration exceeds such monetary value.

[Subsection (18) substituted by section 152 of Act 60 of 2001]

(19)   Where any token, voucher or stamp (other than a postage stamp as defined in section 1 of the Postal Services Act, 1998) is issued for a consideration in money and the holder thereof is entitled on the surrender thereof to receive goods or services specified on such token, voucher or stamp or which by usage or arrangement entitles the holder to specified goods or services, without any further charge, the value of the supply of the goods or services made upon the surrender of such token, voucher or stamp is regarded as nil.

[Subsection (19) substituted by section 152 of Act 60 of 2001]

(20)   Where any token, voucher or stamp is issued by any vendor for no consideration and the holder thereof is entitled on surrender thereof to another person, being the supplier of goods or services, to a discount on the price of goods or services supplied to the holder, the consideration in money for the supply of such goods or services shall be deemed to include the monetary value stated on such token, voucher or stamp: Provided that such monetary value shall be deemed to include tax.

[Subsection (20) substituted by section 12 of Act 20 of 1994]

(21)   Where any supply of entertainment is made by a vendor and in terms of section 17 no deduction of input tax was made in terms of section 16(3) in respect of the acquisition by the vendor of goods or services for the purpose of such entertainment, the value of such supply shall be deemed to be nil.

[Subsection (21A) inserted by section 16 of Act 136 of 1992 and substituted by section 12 of Act 20 of 1994]

(22A) . . . . . .

[Subsection (22A) inserted by section 21(1)(b) of Act 37 of 1996 and deleted by section 63(1) of Act 23 of 2020 effective on 1 April, 2021]

(22)   Where a taxable supply is not the only matter to which a consideration relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it.

(22A) Where any supply is made which comprises the management of a superannuation scheme as contemplated in section 2(1)(i), the consideration in money for such supply shall be deemed to be the greater of the cost of making such supply or any consideration for such supply.

[Subsection (22A) inserted by section 21 of Act 37 of 1996]

(22B) Where any supply of goods is deemed to be made as contemplated in section 8(20), the consideration in money for such supply shall be deemed to be the total amount of the value placed on the importation of the goods in terms of section 13(2) and the amount of tax levied on the importation in terms of section 7(1)(b).

[Subsection (22B) inserted by section 27 of Act 27 of 1997]

(23)   Save as otherwise provided in this section, where any supply is made for no consideration the value of that supply shall be deemed to be nil.

(24)   Where a game viewing vehicle or a hearse is deemed to be supplied by a vendor in terms of section 8(14)(b) or (14A) the supply shall be deemed to be made for a consideration in money equal to the open market value, of that game viewing vehicle or hearse.

[Subsection (24) inserted by section 97 of Act 32 of 2004]

(25)   Where any goods are deemed by section 8(24) to be supplied to any person, the consideration in money shall be deemed to be the open market value of those goods on the date contemplated in section 9(11).

[Subsection (25) added by section 104 of Act 31 of 2005]

(26)   Where a service is deemed to be supplied under section 8(27), the consideration in money for the supply shall be deemed to be the excess amount contemplated in that section.

[Subsection (26) added by section 80 of Act 20 of 2006]

(27)   Where any supply of goods or services is deemed to be made in terms of section 8(19), the value of such supply shall be deemed to be nil.

[Subsection (27) added by section 168 of Act 31 of 2013 effective on 1 April 2014]

(28)   Where a supply of goods is deemed to be made as contemplated in section 8(29), the value of such supply shall be deemed to be nil.

[Subsection (28) added by section 80(1) of Act 17 of 2017 effective on 1 April, 2018]

(29)   Where goods are deemed to be supplied by a vendor in terms of section 18D(2), the supply shall be deemed to be made for a consideration in money equal to the adjusted cost to the vendor of such fixed property or portion of such fixed property so supplied.

[Subsection (29) added by section 51(1) of Act 20 of 2021 and substituted by section 49(1) of Act 17 of 2023 effective on 1 April, 2024]

11. Zero rating

(1)     Where, but for this section, a supply of goods would be charged with tax at the rate referred to in section 7(1), such supply of goods shall, subject to compliance with subsection (3) of this section, be charged with tax at the rate of zero per cent where-

(a)     the supplier has supplied the goods (being movable goods) in terms of a sale or instalment credit agreement and-

(i)      the supplier has exported the goods in the circumstances contemplated in paragraph (a), (b) or (c) of the definition of “exported” in section 1; or

(ii)     the goods have been exported by the recipient and the supplier has elected to supply the goods at the zero rate as contemplated in Part 2 of the regulation referred to in paragraph (d) of the definition of ‘exported’ in section 1: Provided that –

[Words preceding the proviso substituted by section 132 of Act 25 of 2015 effective on 8 January 2016]

(aa)   where a supplier has supplied the goods to the recipient in the Republic otherwise than in terms of this subparagraph, such supply shall not be charged with tax at the rate of zero per cent; and

(bb)   where the goods have been removed from the Republic by the recipient in accordance with the regulation referred to in paragraph (d) of the definition of ‘exported’ in section 1, such tax shall be refunded to the recipient in accordance with the provisions of section 44(9); or

[Item (bb) substituted by section 132 of Act 25 of 2015 effective on 8 January 2016]

[Paragraph (a) substituted by section 27 of Act 136 of 1991 and section 85 of Act 53 of 1999]

(b)     the goods have been supplied in the course of repairing, renovating, modifying, treating, processing, cleaning, reconditioning or manufacture of any goods to which subsection (2)(g)(ii) or (iv) refers and the goods supplied—

(i)      are wrought into, affixed to, attached to or otherwise form part of those other goods; or

(ii)     being consumable goods, become unusable or worthless as a direct result of being used in that repair, renovation, modification or treatment process; or

[Paragraph (b) amended by section 27(b) of Act 136 of 1991 and by section 81(1)(a) of Act 17 of 2017 effective on 1 April 2018]

(c)     the goods (being movable goods) are supplied to a lessee or other person under a rental agreement, charter party or agreement for chartering, if the goods are used exclusively in an export country or by a customs controlled area enterprise or an SEZ operator in a customs controlled area:  Provided that this subsection shall not apply where a ‘motor car’ as defined in section 1 is supplied to a person located in a customs controlled area;

[Paragraph (c) substituted by section 98 of Act 32 of 2004, section 81 of Act 20 of 2006 and section 25 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

(d)     the goods (being movable goods) are supplied to a lessee or other person under a rental agreement, charter party or agreement for chartering, if those goods are used by that lessee or other person exclusively in any commercial, financial, industrial, mining, farming, fishing or professional concern conducted in an export country and payment of rent or other consideration under that agreement is effected from such export country; or

[Paragraph (d) substituted by section 98 of Act 32 of 2004]

(e)     the supply is to a registered vendor of an enterprise or of a part of an enterprise which is capable of separate operation, where the supplier and the recipient have agreed in writing that such enterprise or part, as the case may be, is disposed of as a going concern: Provided that-

(i)      such enterprise or part, as the case may be, shall not be disposed of as a going concern unless-

(aa)   such supplier and such recipient have, at the time of the conclusion of the agreement for the disposal of the enterprise or part, as the case may be, agreed in writing that such enterprise or part, as the case may be, will be an income-earning activity on the date of transfer thereof; and

(bb)   the assets which are necessary for carrying on such enterprise or part, as the case may be, are disposed of by such supplier to such recipient; and

(cc)   in respect of supplies on or after 1 January 2000, such supplier and such recipient have at the time of the conclusion of the agreement for the disposal of such enterprise or part, as the case may be, agreed in writing that the consideration agreed upon for that supply is inclusive of tax at the rate of zero per cent;

[Subparagraph (cc) inserted by section 85 of Act 53 of 1999]

(ii)     where the enterprise or part, as the case may be, disposed of as a going concern has been carried on in, on or in relation to goods or services applied mainly for purposes of such enterprise or part, as the case may be, and partly for other purposes, such goods or services shall, where disposed of to such recipient, for the purposes of this paragraph and section 18A be deemed to form part of such enterprise or part, as the case may be, notwithstanding the provisions of paragraph (v) of the proviso to the definition of “enterprise” in section 1; or

[Paragraph (e) substituted by section 17 of Act 136 of 1992 and section 13 of Act 20 of 1994]

(f)     the supply is to the South African Reserve Bank, the South African Mint Company (Proprietary) Limited or any bank registered under the Banks Act, 1990 (Act No. 94 of 1990), of gold in the form of bars, blank coins, ingots, buttons, wire, plate or granules or in solution, which has not undergone any manufacturing process other than the refining thereof or the manufacture or production of such bars, blank coins, ingots, buttons, wire, plate, granules or solution; or

[Paragraph (f) substituted by section 17 of Act 136 of 1992 and section 13 of Act 20 of 1994]

(g)     the supply is of such goods used or consumed for agricultural, pastoral or other farming purposes as are set forth in Part A of Schedule 2, provided such supply is made in compliance with such conditions as may be prescribed in the said Part; or

[Paragraph (g) substituted by section 17 of Act 136 of 1992]

(h)     the goods consist of fuel levy goods referred to in Fuel Item Levy numbers 195.10.03, 195.10.17, 195.20.01 and 195.20.03 in Part 5A of Schedule No. 1 to the Customs and Excise Act; or

[Paragraph (h) substituted by section 27 of Act 136 of 1991, section 105 of Act 31 of 2005 and section 44 of Act 9 of 2006]

(hA)  the goods consist of petroleum oil and oils obtained from bituminous minerals, known as crude, referred to in Heading No. 27.09 in Chapter 27 of Part 1 of Schedule No. 1 to the Customs and Excise Act when supplied for the purpose of being refined for the production of fuel levy goods as defined in section 1 of the Customs and Excise Act; or

[Paragraph (hA) inserted by section 27 of Act 136 of 1991 and substituted by section 105 of Act 31 of 2005]

(hB)  ……….

[Paragraph (hB) inserted by section 27 of Act 97 of 1993, substituted by section 153 of Act 60 of 2001 and deleted by section 44 of Act 9 of 2006]

(i)      the goods are supplied as contemplated in section 8 (9);

[Paragraph (i) substituted by section 27 of Act 97 of 1993 and section 169 of Act 45 of 2003]

(j)      the goods consist of such foodstuffs as are set forth in Part B of Schedule 2, but subject to such conditions as may be prescribed in the said Part; or

[Paragraph (j) inserted by section 27 of Act 136 of 1991 and substituted by section 17 of Act 136 of 1992]

(k)     the goods are gold coins supplied as such and which the Reserve Bank has issued in the Republic in accordance with the provisions of section 14 of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989), or which remain in circulation as contemplated in the proviso to subsection (1) of that section; or

[Paragraph (k) inserted by section 17 of Act 136 of 1992]

(l)      the goods consist of illuminating kerosene (marked) intended for use as fuel for illuminating or heating, referred to in Fuel Item Levy number 195.10.13 in Part 5A of Schedule No. 1 to the Customs and Excise Act and are not mixed or blended with another substance; or

[Paragraph (l) inserted by section 43 of Act 5 of 2001 and substituted by section 105 of Act 31 of 2005 and section 44 of Act 9 of 2006]

(m)    a vendor supplies movable goods, (excluding any ‘motor car’ as defined in section 1), in terms of a sale or instalment credit agreement to a customs controlled area enterprise or an SEZ operator and those goods are physically delivered to that customs controlled area enterprise or SEZ operator in a customs controlled area either-

[Words preceding subparagraph (i) substituted by section 25 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

(i)      by the supplier; or

(ii)     by a cartage contractor, whose activities include transporting goods and who is engaged by the supplier to deliver the goods and that supplier is liable for the full cost relating to that delivery;

[Subparagraph (ii) substituted by section 132 of Act 25 of 2015 effective on 1 April 2016]

[Paragraph (m) substituted by section 98 of Act 32 of 2004 and section 81 of Act 20 of 2006]

(mA) a vendor supplies fixed property situated in a customs controlled area to a customs controlled area enterprise or an SEZ operator under any agreement of sale or letting or any other agreement under which the use or permission to use such fixed property is granted;

[Paragraph (mA) inserted by section 81 of Act 20 of 2006 and section 25 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

(n)     the goods consist of-

(i)      any old order right or OP26 right as defined in Schedule II of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002), converted into a new right pursuant to item 7(3) of that Schedule if that supply is made pursuant to that conversion; or

[Subparagraph (i) substituted by section 134 of Act 24 of 2011 with effect from 10 January 2012]

(ii)   ……….

[Subparagraph (ii) substituted by section 98 of Act 32 of 2004 and deleted by section 134 of Act 24 of 2011 with effect from 10 January 2012]

[Paragraph (n) added by section 169 of Act 45 of 2003]

(o)     ……….

[Paragraph (o) added by section 169 of Act 45 of 2003 and deleted by section 105 of Act 31 of 2005]

(p)

(i)      the supply of an enterprise or part of an enterprise as a going concern, by a vendor to that vendor’s branch or division, which branch or division is separately registered in terms of section 50(2): Provided that that enterprise or part, as the case may be, shall not be disposed of as a going concern unless-

(aa)   that enterprise or part is capable of separate operation; and

(bb)   will be an income-earning activity on the date of transfer thereof; and

(cc)   a tax invoice issued in accordance with section 20 in relation to that supply is inclusive of tax at the rate of zero per cent; or

(ii)     the supply of an enterprise, branch or division, as contemplated in section 50(2), as a going concern to a separately registered enterprise of that vendor: Provided that that enterprise or part, as the case may be, shall not be disposed of as a going concern unless-

(aa)   that enterprise or part is capable of separate operation; and

(bb)   will be an income-earning activity on the date of transfer thereof; and

(cc)   a tax invoice issued in accordance with section 20 in relation to that supply is inclusive of tax at the rate of zero per cent;

[Paragraph (p) inserted by section 98 of Act 32 of 2004]

(q)     the goods-

(i)      are supplied by a vendor to a person who is not a resident of the Republic and not a vendor and who has contracted with that vendor to deliver goods to a recipient, who is a vendor in the Republic; and

(ii)     form part of a supply by the person referred to in paragraph (i) to the recipient; and

(iii)     are used by the recipient wholly for the purposes of consumption, use or supply in the course of making taxable supplies; or

[Paragraph (q) added by section 105 of Act 31 of 2005 and amended by section 81 of Act 20 of 2006]

(r)      compensation is paid by a public authority in terms of section 19 of the Animal Diseases Act, 1984 (Act No. 35 of 1984) for the supply of a ‘controlled animal or thing’ as defined in that Act to that public authority:

[Paragraph (r) added by section 81 of Act 20 of 2006]

(s)     the goods (being fixed property) are supplied to the Cabinet member responsible for land reform who acquired those goods in terms of the Provision of Land and Assistance Act, 1993 (Act No. 126 of 1993), or section 42E of the Restitution of Land Rights Act, 1994 (Act No. 22 of 1994); or

[Paragraph (s) added by section 108 of Act 60 of 2008 and substituted by section 169 of Act 31 of 2013 effective on 1 April 2014]

(t)      the goods (being fixed property) are supplied to a person to the extent that the consideration for those goods is an advance or subsidy granted in terms of the Provision of Land and Assistance Act, 1993 (Act No. 126 of 1993); or

[Paragraph (t) added by section 108 of Act 60 of 2008 with effect from 31 Oct 2009]

(u)     the supply of goods, other than the supply of goods by an inbound duty and tax free shop, which have been imported and entered for storage in a licensed Customs and Excise storage warehouse but have not been entered for home consumption; or

[Paragraph (u) added by section 108 of Act 60 of 2008]

(v)     the supply of goods by an inbound duty and tax free shop; or

[Paragraph (v) added by section 108(1)(a) of Act 60 of 2008 and amended by section 70(1) of Act 34 of 2019 deemed effective on 1 April, 2019]

(w)    the goods supplied consist of sanitary towels (pads) as are set forth in Part C of Schedule 2:

[Paragraph (w) added by section 70(1) of Act 34 of 2019 deemed effective on 1 April, 2019]

Provided that paragraphs (a), (b), (c), (d) and (i) of this subsection shall not apply in respect of any supply of goods by a vendor if in respect of such goods input tax contemplated in paragraph (b) of the definition of “input tax” in section 1 has been deducted in terms of section 16 (3) by that vendor or any other person where that vendor and that other person are connected persons.

[Subsection (1) amended by section 28 of Act 27 of 1997]

(2)     Where, but for this section, a supply of services, other than services contemplated in section 11(2)(k) that are electronic services, would be charged with tax at the rate referred to in section 7(1), such supply of services shall, subject to compliance with subsection (3) of this section, be charged with tax at the rate of zero per cent where-

[Words preceding paragraph (a) substituted by section 96 of Act 43 of 2014 effective on 1 April 2015]

(a)     the services (not being ancillary transport services) comprise the transport of passengers or goods-

(i)     from a place outside the Republic to another place outside the Republic; or

[Subparagraph (i) substituted by section 13 of Act 20 of 1994]

(ii)   from a place in the Republic to a place in an export country; or

[Subparagraph (ii) substituted by section 13 of Act 20 of 1994]

(iii)  from a place in an export country to a place in the Republic; or

[Subparagraph (iii) substituted by section 13 of Act 20 of 1994]

(b)     the services comprise the transport of passengers from a place in the Republic to another place in the Republic to the extent that that transport is by aircraft and constitutes “international carriage” as defined in Article 1 of the Convention set out in the Schedule to the Carriage by Air Act, 1946 (Act No. 17 of 1946); or

[Paragraph (b) substituted by section 13 of Act 20 of 1994]

(c)     the services (including any ancillary transport services) comprise the transport of goods from a place in the Republic to another place in the Republic to the extent that those services are supplied by the same supplier as part of the supply of services to which paragraph (a) applies; or

[Paragraph (c) substituted by section 13 of Act 20 of 1994]

(d)

(i)     the services comprise the—

(aa)    insuring;

(bb)    arranging of the insurance; or

(cc)    arranging of the transport,

of passengers or goods to which any provisions of paragraph (a), (b) or (c) apply; or

(ii)     insuring or the arranging of the insurance of passengers on an international journey, where the insurance of those passengers is provided under a single inbound or outbound insurance policy in respect of which a single premium is levied; or

[Paragraph (d) substituted by section 81(1)(b) of Act 17 of 2017 effective on 1 April 2018]

(e)     the services comprise the transport of goods or any ancillary transport services supplied directly in connection with the exportation from or the importation into the Republic of goods or the movement of goods through the Republic from one export country to another export country, where such services are supplied directly to a person who is not a resident of the Republic and is not a vendor, otherwise than through an agent or other person; or

[Paragraph (e) substituted by section 13 of Act 20 of 1994]

(f)     the services are supplied directly in connection with land, or any improvement thereto, situated in any export country; or

(g)     the services are supplied directly in respect of-

(i)      movable property (excluding debt securities, equity securities or participatory securities, as respectively defined in section 2(2), listed on an exchange as defined in section 1 of the Financial Markets Act, 2012 (Act 19 of 2012) and licensed under section 9 of that Act) situated in any export country at the time the services are rendered; or;

[Sub­paragraph (i) substituted by section 81(1)(c) of Act 17 of 2017 effective on 1 April 2018]

(ii)     goods temporarily admitted into the Republic from an export country which are exempt from tax on importation under Items 470 and 480 of paragraph 8 of Schedule 1; or

[Subparagraph (ii) amended by section 27 of Act 97 of 1993 and substituted by section 153 of Act 60 of 2001]

(iii)    goods in respect of which the provisions of paragraph (b) or (c) of the definition of “exported” in section 1 apply; or

(iv)    the repair, maintenance, cleaning or reconditioning of a foreign-going ship or foreign-going aircraft; or

(h)     the services comprise-

(i)      the handling, pilotage, salvage or towage of any foreign-going ship or foreign-going aircraft while situated in the Republic; or

[Subparagraph (i) substituted by section 13 of Act 20 of 1994]

(ii)     services provided in connection with the operation or management of any foreign-going ship or foreign-going aircraft; or

(iii)    the storage, repair, maintenance, cleaning, management or arranging the provision of a container referred to in paragraph (1)(i) of Schedule 1 or the arranging of those services,

[Subparagraph (iii) inserted by section 17 of Act 136 of 1992 and substituted by section 98 of Act 32 of 2004]

where the services are supplied directly to a person who is not a resident of the Republic and is not a vendor, otherwise than through an agent or other person; or

[Paragraph (h) amended by section 13 of Act 20 of 1994]

(i)      the services of arranging-

(i)      the supply of goods as contemplated in paragraph (b) or (c) of the definition of “exported”; or

(ii)      the supply of services referred to in paragraph (g)(iv) or (h); or

(iii)     the transport of goods (including ancillary transport services) within the Republic,

[Subparagraph (iii) substituted by section 13 of Act 20 of 1994]

for a person who is not a resident of the Republic and is not a vendor; or

[Paragraph (i) amended by section 13 of Act 20 of 1994]

(j)      the services comprise the repair, maintenance, cleaning or reconditioning of a railway train operated by a person who is not a resident of the Republic and is not a vendor; or

[Paragraph (j) substituted by section 13 of Act 20 of 1994]

(k)     the services are physically rendered elsewhere than in the Republic or to a customs controlled area enterprise or an SEZ operator in a customs controlled area; or

[Paragraph (k) substituted by section 13 of Act 20 of 1994, section 28 of Act 27 of 1997, section 169 of Act 45 of 2003, section 81 of Act 20 of 2006 and section 25 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

(l)      the services are supplied to a person who is not a resident of the Republic, not being services which are supplied directly-

(i)      in connection with land or any improvements thereto situated inside the Republic; or

(ii)     in connection with movable property (excluding debt securities, equity securities or participatory securities) situated inside the Republic at the time the services are rendered, except movable property which-

(aa)   is exported to the said person subsequent to the supply of such services; or

(bb)   forms part of a supply by the said person to a registered vendor and such services are supplied to the said person for purposes of such supply to the registered vendor; or

[Subparagraph (ii) amended by section 85 of Act 53 of 1999]

(iii)    to the said person or any other person, other than in circumstances contemplated in subparagraph (ii) (bb), if the said person or such other person is in the Republic at the time the services are rendered,

[Subparagraph (iii) substituted by section 85 of Act 53 of 1999]

and not being services which are the acceptance by any person of an obligation to refrain from carrying on any enterprise, to the extent that the carrying on of that enterprise would have occurred within the Republic; or

[Paragraph (l) substituted by section 13 of Act 20 of 1994, amended by section 28 of Act 27 of 1997 and substituted by section 89 of Act 30 of 1998]

(m)    the services comprise-

(i)      the filing, prosecution, granting, maintenance, transfer, assignment, licensing or enforcement, including the incidental supply by the supplier of such services of any other services which are necessary for the supply of such services, of intellectual property rights, including patents, designs, trade marks, copyrights, know-how, confidential information, trade secrets or similar rights; or

[Subparagraph (i) substituted by section 13 of Act 20 of 1994]

(ii)     the acceptance by any person of an obligation to refrain from pursuing or exercising in whole or in part any such rights,

where and to the extent that those rights are for use outside the Republic; or

[Paragraph (m) amended by section 13 of Act 20 of 1994]

(n)     the services comprise the carrying on by a welfare organisation of the activities referred to in the definition of ‘welfare organisation’ in section 1 and to the extent that any payment in respect of those services is made in terms of section 8(5) those services shall be deemed to be supplied by that organisation to a public authority or municipality; or

[Paragraph (n) substituted by section 169 of Act 45 of 2003 and section 44 of Act 9 of 2006]

(o)     the services are supplied as contemplated in section 8(9) by a vendor, not being services which are supplied directly-

(i)      in connection with land or any improvements thereto situated inside the Republic; or

(ii)     in connection with movable property (excluding debt securities, equity securities or participatory securities) situated inside the Republic at the time the services are rendered, except movable property which-

(aa)   is consigned or delivered to the said person at an address in an export country subsequent to the supply of such services; or

(bb)   forms part of a supply by the said person to a registered vendor and such services are supplied to the said person for purposes of such supply to the registered vendor; or

(iii)    to the said person or any other person, other than in the circumstances contemplated in subparagraph (ii)(bb), if the said person or such other person is in the Republic at the time that the services are rendered; or

[Paragraph (o) substituted by section 27 of Act 97 of 1993 and section 169 of Act 45 of 2003 and amended by section 44 of Act 9 of 2006]

(p)     ……….

[Paragraph (p) added by section 17 of Act 136 of 1992 and deleted by section 169 of Act 45 of 2003]

(q)     the services are deemed to be supplied in terms of section 8(5B);

[Paragraph (q) added by section 85 of Act 53 of 1999, substituted by section 169 of Act 45 of 2003 and section 105 of Act 31 of 2005, amended by section 44 of Act 9 of 2006 and substituted by section 81 of Act 20 of 2006 and section 29 of Act 36 of 2007]

(r)      the services comprise of the vocational training of employees (other than educational services contemplated in section 12(h)) for the benefit of an employer who is not a resident of the Republic and who is not a vendor: Provided that this paragraph shall not apply where the supply is made to a person who is a resident of the Republic or a vendor; or

[Paragraph (r) added by section 77 of Act 30 of 2000, amended by section 169 of Act 45 of 2003 and substituted by section 132 of Act 25 of 2015 effective on 1 April 2016]

(s)     the services are deemed to be supplied to a public authority or municipality in terms of section 8(23); or

[Paragraph (s) added by section 169 of Act 45 of 2003, substituted by section 44 of Act 9 of 2006, deleted by section 132 of Act 25 of 2015 and re-inserted by section 81 of Act 17 of 2017 effective on 1 April 2017]

(t)      the services are deemed to be supplied in terms of section 8(5A); or

[Paragraph (t) added by section 98 of Act 32 of 2004 and amended by section 21 of Act 9 of 2005, section 105 of Act 31 of 2005 and section 44 of Act 9 of 2006]

(u)     the services are deemed to be supplied in terms of section 8(5) by a designated entity in respect of any payment made in terms of section 10(1)(f) of the Skills Development Act, 1998 (Act No. 97 of 1998), to that designated entity; or

[Paragraph (u) added by section 21 of Act 9 of 2005 and amended by section 105 of Act 31 of 2005]

(v)     the services relate to goods under warranty to the extent that the services are-

(i)    provided in terms of that warranty;

(ii)     supplied to the warrantor for consideration under that warranty given by the warrantor who is—

(aa)   not a resident of the Republic;

(bb)   not a vendor; and

(cc)   outside the Republic at the time the services are rendered; and

(iii)     in respect of goods that were subject to tax upon importation (in terms of section 7(1)(b) of this Act); or

[Paragraph (v) added by section 105 of Act 31 of 2005 and amended by section 44 of Act 9 of 2006]

(w)    a ‘municipal rate’ as defined in section 1, is levied by a municipality; or

[Paragraph (w) added by section 44 of Act 9 of 2006 and amended by section 29 of Act 36 of 2007]

(x)     the services are supplied by a vendor, being the owner of a horse, to the operator of a horse-racing event to the extent of any consideration paid as a result of the successful participation of that horse in that event.

[Paragraph (x) added by section 29 of Act 36 of 2007]

[Subsection (2) amended by section 28 of Act 27 of 1997]

(y)     the services as contemplated in the International Telecommunication Union Regulations contained in the Final Acts of the World Conference on International Telecommunications (Dubai, 2012) and supplied by Telecommunications Service Providers registered in the Republic in terms of the Electronic Communications Act, 2005 (Act 36 of 2005), to International Telecommunications Service Providers, provided that such services are not supplied to a branch, main business or customer of the International Telecommunications Service Providers situated in the Republic at the time the services are rendered, unless such services are international roaming services.

[Subsection (2) amended by section 28(b) of Act 27 of 1997 and by section 96(1)(b) of Act 43 of 2014 effective on 1 April, 2015. Paragraph (y) added by section 64(1) of Act 23 of 2020 and substituted by section 52(1) of Act 20 of 2021 effective on 1 January, 2022]

(3)     Where a rate of zero per cent has been applied by any vendor under the provisions of this section, the vendor shall obtain and retain such documentary proof substantiating the vendor’s entitlement to apply the said rate under those provisions as is acceptable to the Commissioner.

[Subsection (3) substituted by section 108 of Act 60 of 2008]

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]

13. Collection of tax on importation of goods, determination of value thereof and exemptions from tax

(1)     For the purposes of this Act goods shall be deemed to be imported into the Republic on the date on which the goods are in terms of the provisions of the Customs and Excise Act deemed to be imported: Provided that-

(i)      goods which are entered for home consumption in terms of the Customs and Excise Act, shall be deemed to have been imported on the date on which they are so entered;

(ii)    ………..

[Subparagraph (ii) substituted by section 170 of Act 45 of 2003, section 100 of Act 32 of 2004 and section 106 of Act 31 of 2005 and deleted by section 110 of Act 60 of 2008]

(iii)     goods imported from or via Botswana, eSwatini, Lesotho or Namibia shall be declared and tax paid on entry into the Republic as prescribed by the Commissioner in Chapter XIIA of the Rules under the Customs and Excise Act.

[Subsection (1) substituted by section 30(a) of Act 27 of 1997 and amended by section 100(1)(a) of Act 32 of 2004 effective on the date of promulgation of that Act, 24 January, 2005. Paragraph (iii) substituted by section 86(1)(a) of Act 53 of 1999 and by section 23(a) of Act 16 of 2022]

(2)     For the purposes of this Act the value to be placed on the importation of goods into the Republic shall be deemed to be-

(a)     where such goods are entered or are required to be entered for home consumption in terms of the Customs and Excise Act, the value thereof for customs duty purposes, plus any duty levied in terms of the said Act in respect of the importation of such goods, plus 10 per cent of the said value; or

(b)     where such goods have their origin in Botswana, eSwatini, Lesotho or Namibia and are imported from such a country, the amount of the value as contemplated in paragraph (a), except that such value shall not be increased by the factor of 10 per cent:

[Paragraph (b) substituted by section 86(1)(b) of Act 53 of 1999 and by section 23(b) of Act 16 of 2022]

Provided that where the Minister has made a regulation determining the value of such goods for the purposes of this section, the greater of such determined value or the value declared on importation shall be used instead of the value for customs purposes.

[Subsection (2) amended by section 30 of Act 27 of 1997]

(2A)  ……….

[Subsection (2A) inserted by section 135 of Act 24 of 2011, substituted by section 24 of Act 44 of 2014 effective on the date on which the Customs Control Act, 2014 takes effect, substitution by section 24 of Act 44 of 2014 repealed by section 79 of Act 13 of 2017 effective on 20 January 2015) and deleted by section 82 of Act 17 of 2017 effective on 10 January 2012]

(2B)  Notwithstanding subsection (2), the value to be placed on the importation of goods into the Republic where-

(a)     Note 1A of Item No. 412.07 of Schedule 1 to this Act is applicable; or

(b)     Note 5(a)(ii)(aa) of Item No. 470.03 of 00.00 of 02.00 of Schedule 1 to this Act is applicable,

shall be the value determined under section 10(3).

[Subsection (2B) inserted by section 135 of Act 24 of 2011 with effect from 10 January 2012 and substituted by section 171 of Act 31 of 2013 effective on 1 January 2014 – date of operation in section 171 of Act 31 of 2013 as substituted by section 132 of Act 43 of 2014]

(3)     The importation of the goods set forth in Schedule 1 to this Act is exempt from the tax imposed in terms of section 7(1)(b).

[Subsection (3) amended by section 15 of Act 20 of 1994 and substituted by section 155 of Act 60 of 2001]

(4)     ……….

[Subsection (4) amended by section 19 of Act 136 of 1992 and section 30 of Act 27 of 1997, substituted by section 155 of Act 60 of 2001 and deleted by section 100 of Act 32 of 2004]

(5)     The Commissioner may make such arrangements as the Commissioner may deem necessary-

(a)     for the collection (in such manner as the Commissioner may determine) by a SARS official, or the Managing Director of the South African Post Office Limited on behalf of the Commissioner, of the tax payable in terms of this Act in respect of the importation of any goods into the Republic; and

 [Paragraph (a) substituted by section 70 of Act 19 of 2001, amended by section 155 of Act 60 of 2001 and substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(b)     for the exchange of such information as is necessary for the carrying out of such arrangements.

[Subsection (5) amended by section 34 of Act 34 of 1997, section 86 of Act 53 of 1999 and section 70 of Act 19 of 2001]

(6)     Subject to this Act, the provisions of the Customs and Excise Act relating to the importation, transit, coastwise carriage and clearance of goods and the payment and recovery of duty shall mutatis mutandis apply as if enacted in this Act, whether or not the said provisions apply for the purposes of any duty levied in terms of the Customs and Excise Act.

[Subsection (6) substituted by section 29 of Act 136 of 1991, section 30 of Act 27 of 1997 and section 106 of Act 31 of 2005]

14. Collection of value-added tax on imported services, determination of value thereof and exemptions from tax

(1)     Where tax is payable in terms of section 7(1)(c) in respect of the supply of imported services the recipient shall within 30 days of the date referred to in subsection (2)-

(a)       obtain, complete and retain the form prescribed by the Commissioner; and

[Paragraph (a) substituted by section 271 read with paragraph 113 of Schedule 1 of Act 28 of 2011 and by section 19 of Act 24 of 2020]

(b)     calculate the tax payable on the value of the imported services at the rate of tax in force on the date of supply of the imported services and pay such tax to the Commissioner:

Provided that where the recipient is a vendor, that vendor must calculate the tax payable on the value of the imported services at the rate of tax in force on the date of supply of the imported services and must furnish the Commissioner with a return reflecting the information required for the purposes of the calculation of the tax in terms of section 14 and pay such tax to the Commissioner in accordance with section 28.

[Subsection (1) substituted by section 28 of Act 8 of 2010 effective on 1 February 2011]

(2)     For the purposes of this Act, a supply of imported services shall be deemed to take place at the time an invoice is issued by the supplier or recipient in respect of that supply or the time any payment is made by the recipient in respect of that supply, whichever time is the earlier.

(3)     For the purposes of this Act, the value to be placed on the supply of imported services shall, save as otherwise provided in this section, be the value of the consideration for the supply, as determined in terms of section 10(3) or the open market value of the supply, whichever is the greater.

(4)     Where a person carries on activities outside the Republic which do not form part of the activities of any enterprise carried on by him and in the course of such first-mentioned activities services are rendered for the purposes of such enterprise which, if rendered by anybody other than the said person, would be imported services, such services shall for the purposes of section 7(1)(c) be deemed to be imported services supplied and received by that person in respect of such enterprise.

(5)     The tax chargeable in terms of section 7(1)(c) shall not be payable in respect of-

(a)     a supply which is chargeable with tax in terms of section 7(1)(a) at the rate provided in section 7;

(b)     a supply which, if made in the Republic, would be charged with tax at the rate of zero per cent applicable in terms of section 11 or would be exempt from tax in terms of section 12;

(c)     a supply of an educational service by an educational institution established in an export country which is regulated by an educational authority in that export country; or

[Paragraph (c) added by section 171 of Act 45 of 2003]

(d)     a supply by a person of services as contemplated in terms of proviso (iii)(aa) to the definition of ‘enterprise’ in section 1.

[Paragraph (d) added by section 101 of Act 32 of 2004]

(e)     a supply of services of which the value in respect of that supply does not exceed R100 per invoice.

[Paragraph (e) added by section 136 of Act 24 of 2011 with effect from 10 January 2012]

15. Accounting basis

(1)     Except as hereinafter provided, every vendor shall account for tax payable on an invoice basis for the purposes of section 16.

(2)     Subject to the provisions of subsections (2A) and (3), the Commissioner may, on application in writing by a vendor, direct that the vendor account for the tax payable on a payments basis for the purposes of section 16 with effect from the vendor’s registration in terms of this Act or, where he has accounted for tax payable on an invoice basis prior to making an application under this subsection, from the commencement of the tax period immediately following the tax period during which that direction is made by the Commissioner (hereinafter referred to as the changeover period), if-

(a)     the vendor is-

(i)     a public authority;

(ii)     any water board or any other institution which has powers similar to those of any such board listed in Part B of Schedule 3 of the Public Finance Management Act, 1999 (Act No. 1 of 1999), which would have complied with the definition of ‘local authority’ in section 1 prior to the deletion of that definition by section 40(1)(i) of the Small Business Amnesty and Taxation Laws Act, 2006 (Act No. 9 of 2006);

(iii)  ……….

[Subparagraph (iii) deleted by section 134 of Act 25 of 2015 effective on 1 April 2016]

(iv)    a “municipal entity” as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000), where that municipal entity supplies—

(aa)   electricity, gas or water; or

(bb)   the services consisting of the drainage, removal or disposal of sewage or garbage;

(v)   a municipality;

[Subparagraph (v) amended by section 172 of Act 31 of 2013 effective on 1 April 2014]

(vi)  an association not for gain;

[Paragraph (a) substituted by section 46 of Act 9 of 2006, section 37 of Act 21 of 2006 and section 13 of Act 9 of 2007 and amended by section 134 of Act 25 of 2015 effective on 1 April 2016]

(vii)   carrying on an enterprise as contemplated in paragraph (b)(vi) and (vii) of the definition of “enterprise” in section 1(1); or

[Subparagraph (vii) added by section 172(1)(b) of Act 31 of 2013 and substituted by section 65(1) of Act 23 of 2020 effective on 1 April, 2021]

(viii)  the South African Broadcasting Corporation Limited contemplated in section 8A of the Broadcasting Act, 1999 (Act No. 4 of 1999); or

[Subparagraph (vii) added by section 134 of Act 25 of 2015 effective on 1 April 2016]

(b)     the vendor is a natural person (other than the trustee of a trust fund) or an unincorporated body of persons of which all the members are natural persons, and-

(i)      the total value of the vendor’s taxable supplies in the period of 12 months ending at the end of any tax period has not exceeded R2,5 million; or

[Subparagraph (i) substituted by section 20 of Act 136 of 1992]

(ii)      the total value of the vendor’s taxable supplies in the period of 12 months beginning on the first day of any month is not likely to exceed the amount specified in subparagraph (i):

[Paragraph (b) amended by section 90 of Act 30 of 1998]

Provided that the provisions of this Act relating to the determination of the value of any supply of goods or services, whether such supply is made before or on or after the commencement date, shall apply for the purposes of this subsection, but no regard shall be had to any tax charged in respect of such supply.

[Subsection (2) amended by section 31 of Act 27 of 1997]

(2A)  Any vendor, other than-

(i)      a public authority;

(ii)     a municipal entity as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000), where that municipal entity supplies-

(aa)   electricity, gas or water; or

(bb)   the services consisting of the drainage, removal or disposal of sewage or garbage; or

(iii)    a municipality,

that in terms of subsection (2) accounts for tax payable on a payments basis shall, in respect of any supply of goods (other than fixed property) or services in respect of which the consideration in money is R100 000 or more, account for the tax payable on an invoice basis.

[Subsection (2A) inserted by section 31 of Act 27 of 1997 and substituted by section 46 of Act 9 of 2006 and section 85 of Act 15 of 2016 effective on 1 April 2017]

(2B)  Any vendor registered in terms of section 23(3)(b)(ii) shall account for tax payable on a payment basis for the purposes of section 16 with effect from the date of the vendor’s registration: Provided that the vendor, subject to subsection (2)(b), must account for tax payable on an invoice basis from the commencement of the tax period immediately following the tax period when the total value of taxable supplies of that enterprise has exceeded R50 000.

[Subsection (2B) inserted by section 172 of Act 31 of 2013 effective on 1 April 2014]

(3)    Where the Commissioner has under subsection (2) directed that a vendor account for tax payable on a payments basis, and-

(a)     the vendor has ceased to satisfy the conditions of subsection (2) under which any such direction may be given, and-

(i)    the vendor notifies the Commissioner thereof as required by section 25(c); or

(ii)   the Commissioner is otherwise satisfied thereof; or

(b)     the vendor has made an application in writing to the Commissioner to account for tax payable on an invoice basis,

the Commissioner shall direct that the vendor account for the tax payable on an invoice basis with effect from the commencement of a future tax period or, where the vendor has failed to notify the Commissioner that he has ceased to satisfy the conditions of subsection (2), as required by the said section 25(c), any tax period directed by the Commissioner: Provided that for the purposes of paragraph (a) any such vendor shall not cease to satisfy the requirements of subsection (2) where the total value of the vendor’s taxable supplies has exceeded or, as the case may be, will exceed the amount specified for the purposes of subsection (2) (b) solely as a consequence of-

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

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

(cc)    abnormal circumstances of a temporary nature.

[Subsection (3) amended by section 31 of Act 27 of 1997]

(4)     Where a vendor changes from an invoice basis to a payments basis or from a payments basis to an invoice basis he shall furnish to the Commissioner particulars in the prescribed form calculating the tax payable or refundable in respect of the change in the basis of accounting.

(5)     Any vendor to whom subsection (4) applies shall, within the time allowed under this Act for the payment of tax in respect of the tax period immediately preceding the changeover period, pay to the Commissioner the tax payable as calculated in accordance with this section: Provided that where a vendor changes from a payments basis to an invoice basis for the sole reason that such vendor is not a natural person (other than a trustee of a trust fund) or an unincorporated body of persons of which all the members are natural persons, the vendor shall pay to the Commissioner the tax payable as calculated in accordance with this section in equal instalments within the period allowed under this Act for the payment of tax in respect of so many tax periods as the Commissioner may allow, the last of which shall not end on a date later than 10 March 1999.

[Subsection (5) substituted by section 31 of Act 27 of 1997 and amended by section 90 of Act 30 of 1998]

(6)     Where a vendor changes from an invoice basis to a payments basis, the tax payable shall, for the purposes of subsection (5), be-

(a)     an amount equal to the aggregate of the input tax deducted under section 16(3) in relation to the tax periods up to and including the tax period immediately preceding the changeover period, to the extent that that amount exceeds the aggregate amount of input tax that would have been deducted if the vendor had, for those tax periods, been accounting for tax payable on a payments basis,

reduced by-

(b)     an amount equal to the aggregate of the output tax accounted for under section 16(3) in relation to the tax period up to and including the tax period immediately preceding the changeover period, to the extent that that amount exceeds the aggregate amount of output tax that would have been accounted for if the vendor had, for those tax periods, been accounting for tax payable on a payments basis.

(7)     Where a vendor changes from a payments basis to an invoice basis, the tax payable shall, for the purposes of subsection (5), be-

(a)     an amount equal to the aggregate amount of output tax that would have been accounted for under section 16(3) if the vendor had, in relation to the tax periods up to and including the tax period immediately preceding the changeover period, been accounting for tax payable on an invoice basis, to the extent that that amount exceeds the aggregate of the output tax accounted for in those tax periods,

reduced by-

(b)     an amount equal to the aggregate amount of input tax that would have been deducted under section 16(3) if the vendor had, in relation to the tax periods up to and including the tax period immediately preceding the changeover period, been accounting for tax payable on an invoice basis, to the extent that that amount of input tax exceeds the aggregate amount of input tax deducted in those tax periods.

(8)     If, in relation to any particulars required to be furnished under subsection (4)-

(a)     the amount referred to in subsection (6)(b) exceeds the amount referred to in subsection (6)(a); or

(b)     the amount referred to in subsection (7)(b) exceeds the amount referred to in subsection (7)(a),

the amount of the excess shall be refundable to the vendor by the Commissioner in respect of the changeover period as provided in Chapter 13 of the Tax Administration Act, read with section 16(5).

[Subsection (8) substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(9)     Where a vendor’s basis of accounting is changed as contemplated in subsection (2) or (3), the vendor shall prepare lists of debtors and creditors in relation to the vendor’s enterprise showing the amounts owing by such debtors and the amounts owing to such creditors as at the end of the tax period immediately preceding the changeover period.

16. Calculation of tax payable

(1)     The tax payable by a vendor shall be calculated by him in accordance with the provisions of this section in respect of each tax period during which he has carried on an enterprise in respect of which he is registered or is required to be registered in terms of section 23: Provided that the Commissioner may authorise a vendor to calculate the tax payable in accordance with a method which the Minister may prescribe by regulation.

[Subsection (1) amended by section 91 of Act 30 of 1998]

(2)     No deduction of input tax in respect of a supply of goods or services, the importation of any goods into the Republic or any other deduction shall be made in terms of this Act, unless-

[Words preceding paragraph (a) substituted by section 137 of Act 24 of 2011 with effect from 10 January 2012]

(a)     a tax invoice or debit note or credit note in relation to that supply has been provided in accordance with section 20 or 21 and is held by the vendor making that deduction at the time that any return in respect of that supply is furnished;

[Paragraph (a) substituted by section 156 of Act 60 of 2001 and amended by section 172 of Act 45 of 2003]

(b)

(i)    a document as is acceptable to the Commissioner has been issued in terms of section 20(6); or

(ii)   a document issued by the supplier in compliance with section 20(7) or 21(5); or

[Paragraph (b) substituted by section 29 of Act 8 of 2010 effective on 2 November 2010]

(c)     records are maintained as required by section 20(8) or 20(8A) where the supply is a supply of second-hand goods or a supply of goods as contemplated in section 8(10) and in either case is a supply to which that section relates; or

[Paragraph (c) substituted by section 26(1)(b) of Act 44 of 2014 and by section 29(1)(a) of Act 20 of 2022 deemed effective on 1 April, 2022]

(d)     a bill of entry or other document prescribed in terms of the Customs and Excise Act together with the receipt for the payment of the tax in relation to the said importation have been delivered (including by means of an electronic delivery mechanism) in accordance with that Act and are held by the vendor making that deduction, at the time that any return in respect of that importation is furnished; or

[Paragraph (d) inserted by section 21 of Act 136 of 1992, substituted by section 87 of Act 53 of 1999, amended by section 156 of Act 60 of 2001 and substituted by section 25 of Act 44 of 2014 effective on 1 April 2015]

(dA)  a bill of entry or other document prescribed in terms of the Customs and Excise Act as contemplated in section 54(2A) is held by the agent, and a statement as contemplated in section 54(3)(b) is held by the vendor at the time that any return in respect of that  importation is furnished; or

[Paragraph (dA) inserted by section 25 of Act 44 of 2014 effective on 1 April 2015]

(e)     a tax invoice or debit or credit note has been provided as contemplated in section 54(2), and a statement as contemplated in section 54(3)(a) is held by the vendor at the time a return in respect of the supply to the vendor is furnished;

[Paragraph (e) added by section 156 of Act 60 of 2001, amended by section 172 of Act 45 of 2003, substituted by section 30 of Act 36 of 2007 and amended by section 25 of Act 23 of 2015 effective on 1 April 2016]

(f)      the vendor, in the case where an amount is deducted from the sum of the amounts of output tax which are attributable to that period in terms of subsection (3)(c), (d), (dA), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n) or (o), is in possession of documentary proof, as is prescribed by the Commissioner, substantiating the vendor’s entitlement to the deduction at the time a return in respect of the deduction is furnished; or

[Paragraph (f) added by section 30(c) of Act 36 of 2007 and substituted by section 173(1)(a) of Act 31 of 2013, by section 25(1) of Act 23 of 2015, by section 26(1)(a) of Act 16 of 2016 and by section 29(1)(b) of Act 20 of 2022 deemed effective on 1 April, 2022]

(g)

(i)      a ruling requested no later than two months prior to the expiry of the five-year period referred to in subsection (3) and issued in terms of section 41B of this Act or Chapter 7 of the Tax Administration Act confirms that the document in the vendor’s possession is acceptable for the purpose of making a deduction; and

(ii)      the ruling and document are held by the vendor at the time a return in respect of the deduction is furnished: Provided that the Commissioner may only issue a ruling in terms of this paragraph if satisfied that-

(aa)   the vendor has taken reasonable steps to obtain a document required in terms of paragraph (a), (b), (c), (d), (dA), (e) or (f) and is unable to obtain such a document due to circumstances beyond the vendor’s control; and

(bb)   no other provision of this Act can be applied to satisfy the Commissioner that the document in the vendor’s possession is acceptable for purposes of making a deduction:

[Paragraph (g) added by section 25 of Act 23 of 2015 and substituted by section 26 of Act 16 of 2016 effective on 19 January 2017, applies in respect of tax periods commencing on or after that date]

Provided that where a tax invoice or debit note or credit note in relation to that supply has been provided in accordance with this Act, or a bill of entry or other document has been delivered (including by means of an electronic delivery mechanism) in accordance with the Customs and Excise Act, as the case may be, the Commissioner may determine that no deduction for input tax in relation to that supply or importation shall be made unless that tax invoice or debit note or credit note or that bill of entry or other document is retained in accordance with the provisions of section 55 and Part A of Chapter 4 of the Tax Administration Act.

[Proviso to subsection (2) substituted by section 271 of Act 28 of 2011 and section 25 of Act 44 of 2014 effective on 1 April 2015]

[Subsection (2) amended by section 21 of Act 136 of 1992, section 91 of Act 30 of 1998, section 107 of Act 31 of 2005, section 83 of Act 20 of 2006 and section 30 of Act 36 of 2007]

(3)     Subject to the provisions of subsection (2) of this section and the provisions of sections 15 and 17, the amount of tax payable in respect of a tax period shall be calculated by deducting from the sum of the amounts of output tax of the vendor which are attributable to that period, as determined under subsection (4), and the amounts (if any) received by the vendor during that period by way of refunds of tax charged under section 7(1)(b) and (c) and 7(3)(a), the following amounts, namely-

(a)     in the case of a vendor who is in terms of section 15 required to account for tax payable on an invoice basis, the amounts of input tax-

(i)      in respect of supplies of goods and services (not being supplies of second-hand goods to which paragraph (b) of the definition of “input tax” in section 1 applies and supplies referred to in subparagraph (iiA)) made to the vendor during that tax period;

[Subparagraph (i) substituted by section 23 of Act 37 of 1996]

(ii)

(aa)   subject to the provisions of item (bb), in respect of supplies of second-hand goods to which paragraph (b) of the definition of “input tax” in section 1 applies to the extent that payment of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will arise in the future) relating to the purchase price for those supplies has been made during that tax period;

[Item (aa) substituted by section 137 of Act 24 of 2011 with effect from 10 January 2012]

(bb)   in respect of supplies of second-hand goods to which paragraph (b) of the definition of “input tax” in section 1 applies which consist of-

(A)    fixed property in respect of which the provisions of section 9(3)(d) apply if transfer of that fixed property was effected by registration in a deeds registry and the fixed property was registered in the name of the vendor that makes the deduction during that tax period;

[Subitem (A) substituted by section 137 of Act 24 of 2011 with effect from 10 January 2012]

(B)    a share in a share block company which confers a right to or an interest in the use of immovable property if a signed use agreement has been entered into between the company that operates the share block scheme and a member of that company;

[Subitem (B) substituted by section 137 of Act 24 of 2011 with effect from 10 January 2012]

[Words following subitem (B) deleted by section 137 of Act 24 of 2011 with effect from 10 January 2012]

[Subparagraph (ii) substituted by section 30 of Act 97 of 1993 and section 16 of Act 20 of 1994, amended by section 23 of Act 37 of 1996 and substituted by section 32 of Act 27 of 1997]

(iiA)  in respect of taxable supplies made to the vendor under sales concluded on or after 6 June 1996 in respect of which the provisions of section 9(3)(d) apply (other than supplies in respect of which the provisions of section 10 (4) apply), to the extent that payment of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will arise in the future) relating to the purchase price for those supplies has been made during that tax period;

[Subparagraph (iiA) inserted by section 23 of Act 37 of 1996 and substituted by section 32 of Act 27 of 1997]

(iii)    charged in terms of section 7(1)(b) in respect of goods imported into the Republic by the vendor and released in terms of the Customs and Excise Act during that tax period;

[Subparagraph (iii) substituted by section 173 of Act 31 of 2013 and section 98 of Act 43 of 2014 effective on 1 April 2015]

(iv)    charged in terms of section 7(3)(a) in respect of goods subject to excise duty or environmental levy as contemplated in that section and paid during that tax period;

[Subparagraph (iv) substituted by section 83 of Act 8 of 2007 and section 173 of Act 31 of 2013 effective on 1 April 2014]

(v)     calculated in accordance with section 21(2)(b) or 21 (7) or section 22(1), 22(1A) or 22(4), as applicable to the vendor:

[Subparagraph (v) substituted by section 30 of Act 136 of 1991, section 23 of Act 37 of 1996 and section 32 of Act 27 of 1997]

Provided that this paragraph does not apply where a vendor acquires goods or services that are to be awarded as a prize or winnings and in respect of which that vendor qualifies or will qualify for a deduction in terms of paragraph (d).

[Proviso added by section 107 of Act 31 of 2005]

(b)     in the case of a vendor who is in terms of section 15 required to account for tax payable on a payments basis, the amounts of input tax-

(i)      in respect of supplies of goods and services made to the vendor in respect of which the provisions of section 9 (1), (3) (a), (b) or (d) or (4) apply, to the extent that payments of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will arise in the future) relating to the purchase price for those supplies have been made during that tax period;

[Proviso to subparagraph (i) deleted by section 148 of Act 22 of 2012 effective on 10 January 2012]

shall be deducted only after such transfer duty or stamp duty, as the case may be, has been paid;

[Subparagraph (i) substituted by section 30 of Act 97 of 1993 and by section 16 of Act 20 of 1994 and amended by section 23 of Act 37 of 1996]

(ii)     charged in terms of section 7(1)(b) in respect of goods imported into the Republic by the vendor and released in terms of the Customs and Excise Act or in terms of section 7(3)(a) in respect of goods subject to excise duty or environmental levy as contemplated in that section and paid by the vendor during that tax period;

[Subparagraph (ii) substituted by section 83 of Act 8 of 2007 and section 98 of Act 43 of 2014 effective on 1 April 2015]

(iii)    in respect of supplies of goods and services made to the vendor during the tax period, excluding supplies of goods and services to which subparagraph (i) of this paragraph applies;

(iv)    calculated in accordance with section 21(2)(b) or 21 (7), as applicable to the vendor, to the extent that payments in respect of the tax so calculated have been made during the tax period;

(v)   calculated in accordance with section 22(1), as applicable to the vendor:

[Subparagraph (v) substituted by section 30 of Act 136 of 1991]

Provided that this paragraph does not apply where a vendor acquires goods or services that are to be awarded as a prize or winnings and in respect of which that vendor qualifies or will qualify for a deduction in terms of paragraph (d).

[Proviso added by section 107 of Act 31 of 2005]

(c)     an amount equal to the tax fraction of any payment made during the tax period by the vendor to indemnify another person in terms of any contract of insurance: Provided that this paragraph-

(i)      shall only apply where the supply of that contract of insurance is a taxable supply or where the supply of that contract of insurance would have been a taxable supply if the time of performance of that supply had been on or after the commencement date;

(ii)     shall not apply where that payment is in respect of the supply of goods or services to the vendor or the importation of any goods by the vendor;

(iii)    shall not apply where the supply of that contract of insurance is a supply charged with tax at the rate of zero per cent under section 11 and that other person is, at the time that that payment is made, not a vendor and not a resident of the Republic;

(iv)    shall not apply where that payment results from a supply of goods or services to that other person where those goods are situated outside the Republic or those services are physically performed elsewhere than in the Republic at the time of that supply;

[Subparagraph (iv) substituted by section 16 of Act 20 of 1994]

(d)     an amount equal to the tax fraction of any amount paid during the tax period by the supplier of the services contemplated in section 8(13) as a prize or winnings to the recipient of such services: Provided that where the prize or winnings awarded constitutes either goods or services, the deduction must be limited to the input tax on the initial cost of acquiring those goods or services;

[Paragraph (d) substituted by section 107 of Act 31 of 2005 and section 83 of Act 20 of 2006]

(dA)  an amount equal to the tax fraction of any amount paid by the supplier of the services as contemplated in section 8(13) to the National Lottery Distribution Trust Fund, established by section 21 of the Lotteries Act, 1997 (Act No. 57 of 1997);

[Paragraph (dA) inserted by section 87 of Act 53 of 1999]

(e)     an amount equal to the tax fraction of any amount of tax on totalizator transactions or tax on betting levied and paid for the benefit of any Provincial Revenue Fund by the supplier of the services contemplated in section 8 (13);

(f)     the amounts calculated in accordance with section 18(4) or (5) in relation to any goods or services applied during the tax period as contemplated in that section;

(g)     any amount of input tax in relation to any supply in respect of which subsection (2) of this section has operated to deny a deduction and the vendor has obtained, during the tax period, the prescribed documents or records in relation to that supply;

[Paragraph (g) substituted by section 30 of Act 36 of 2007]

(h)     in the case of a vendor who has supplied goods or services during that tax period otherwise than in terms of section 18(2), an amount determined in accordance with the formula-

A × B × C

in which formula-

“A” represents the tax fraction;

“B” represents the lesser of-

(i)

(aa)   the adjusted cost (including any tax forming part of such adjusted cost) to the vendor of the acquisition, manufacture, assembly, construction or production of those goods or services: Provided that where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of section 10 (4) deemed to be the open market value of the supply, the adjusted cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply; or

[Item. (aa) substituted by section 30 of Act 97 of 1993 and section 172 of Act 45 of 2003]

(bb)   where the vendor was at some time after the acquisition of such goods or services deemed under section 18(4) to have been supplied with such goods or services, the amount which was represented by “B” in the formula contemplated in section 18(4) when such goods or services were deemed to be supplied to the vendor; or

(cc)   where the vendor was at some time after the acquisition of such goods or services required to make an adjustment contemplated in section 18 (2) or (5), the amounts then represented by “A” in the formula contemplated in section 10(9) or “B” in the formula contemplated in section 18 (5) respectively, in the most recent adjustment made in terms of section 18(2) or (5) by the vendor prior to such supply of goods or services; and

(ii)     the open market value of the supply of those goods or services at the time those goods or services are deemed to be supplied; and

“C”  represents the percentage that, immediately before the time of the supply, the use or application of the goods or services for the purpose other than that of making taxable supplies was of the total use or application of the goods or services:

[Definition of “C” amended by section 21 of Act 136 of 1992]

Provided that-

(i)      ……….

[Paragraph (i) of the proviso deleted by section 148 of Act 22 of 2012 effective on 10 January 2012]

(ii)   this subsection does not apply where-

(aa)   such goods or services were acquired before 1 April 2005, or an input tax deduction in respect of that acquisition was denied under proviso (iv) to section 18(4); and

(bb)   the vendor is a public authority which registered prior to 1 April 2005, notwithstanding paragraph (b)(i) of ‘enter­prise’ in section 1 or a public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999); or

[Subparagraph (ii) amended by section 47 of Act 9 of 2006]

(iii)    this subsection does not apply where such goods or services were acquired by a municipality before 1 July 2006, or an input tax deduction in respect of that acquisition was denied in terms of paragraph (v) of the proviso to section 18(4);

[Subparagraph (iii) added by section 47 of Act 9 of 2006]

[Proviso substituted by section 107 of Act 31 of 2005]

[Paragraph (h) amended by section 16 of Act 20 of 1994 and section 91 of Act 30 of 1998]

(i)      an amount equal to the tax fraction of any payment made by the vendor during the tax period in respect of the redemption with him, or his agent, of the monetary value of any token, voucher or stamp contemplated in section 10(20), to a supplier of goods or services who has granted a discount on the surrender to him of such token, voucher or stamp by a recipient of a supply of goods or services if those goods or services are not charged with tax at the rate of zero per cent under section 11;

[Paragraph (i) inserted by section 16 of Act 20 of 1994 and substituted by section 137 of Act 24 of 2011 with effect from 10 January 2012]

(j)     

(i)      in the case of a vendor who has, during the tax period, supplied a property in possession in the course or furtherance of his enterprise under a sale, an amount equal to the tax fraction of the lesser of-

(aa)   the amount (excluding any amount of tax) received in respect of the sale of such property in possession less any amount paid by the vendor in respect of the acquisition of such property in possession; and

(bb)   the amount of the unrecovered loan balance less any amount paid by the vendor in respect of the acquisition of such property in possession:

Provided that no deduction shall be made in terms of this paragraph where the person in default is or will be held liable for payment of such lesser amount;

(ii)   for the purposes of this paragraph-

(aa)   “property in possession” means fixed property acquired by any vendor-

(A)    at a sale in execution as a result of default by any person (other than a person who held or applied such fixed property for the purpose of making taxable supplies in the course or furtherance of his enterprise immediately before such sale in execution) in respect of an unrecovered loan balance due to that vendor in terms of a credit agreement; or

(B)    as a result of an abandonment authorised by the Master of the High Court where such person has defaulted in respect of an unrecovered loan balance due to that vendor in terms of a credit agreement or gone insolvent;

(bb)   “unrecovered loan balance” means the amount of capital, interest and administrative holding costs outstanding in terms of a credit agreement at the date of sale in execution or the date of authorisation of abandonment by the Master of the High Court;

[Paragraph (j) inserted by section 32 of Act 27 of 1997]

(k)     an amount of input tax as determined by the Commissioner paid by a vendor to a supplier of pastoral, agricultural or other farming products who is not a vendor, in terms of a scheme operated by the controlling body of an industry for the development of small-scale farmers approved by the Minister with the concurrence of the Cabinet member responsible for agriculture to compensate that supplier for tax incurred in the production of such goods:

[Paragraph (k) added by section 71 of Act 19 of 2001 and substituted by section 83 of Act 17 of 2017 effective on 18 December 2017]

(l)      an amount as determined by the Commissioner in lieu of a refund in respect of the purchase and use of diesel paid by a vendor to a supplier of pastoral, agricultural or other farming products who is not a vendor, in terms of a scheme operated by the controlling body of an industry for the development of small- scale farmers approved by the Minister with the concurrence of the Cabinet member responsible for agriculture to compensate that supplier for an amount refundable in the production of such goods;

[Paragraph (l) added by section 156 of Act 60 of 2001 and substituted by section 173 of Act 31 of 2013 effective on 1 April 2014]

(m)    an amount equal to the tax fraction initially applied to any excess amount contemplated in section 8(27) which is refunded by the vendor during the tax period:

(n)     an amount equal to the tax fraction of the lesser of the amount contemplated in section 10(25) or the open market value of the movable goods on the date-

(i)      those goods are returned to the customs controlled area enterprise or SEZ operator; or

[Subparagraph (i) substituted by section 26 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

(ii)     those goods are supplied by the customs controlled area enterprise or SEZ operator where those goods are supplied after the relevant prescribed time period contemplated in section 8(24);

[Subparagraph (ii) substituted by section 26(1)(c) of Act 16 of 2016 and amended by section 53(1) of Act 20 of 2021 effective on 1 April, 2022]

[Paragraph (n) inserted by section 111 of Act 60 of 2008]

(o)     an amount equal to the tax fraction of the amount determined in accordance with the provisions of section 10(29):

[Paragraph (o) inserted by section 53(1) of Act 20 of 2021 and substituted by section 29(1)(c) of Act 20 of 2022 deemed effective on 1 April, 2022]

Provided that –

(i)      where any vendor is entitled under the preceding provisions of this subsection to deduct any amount in respect of any tax period from the said sum, the vendor may deduct that amount from the amount of output tax attributable to a later tax period which ends no later than five years after the end of the tax period during which –

(aa)  the tax invoice for that supply should have been issued as contemplated in section 20(1);

(bb)   goods were entered for home consumption in terms of the Customs and Excise Act;

(cc)   second-hand goods were acquired or goods as contemplated in section 8(10) were repossessed or surrendered;

[Subparagraph (cc) substituted by section 173 of Act 31 of 2013 effective on 1 April 2014]

(dd)   the agent should have notified the principal as contemplated in section 54(3); or

(ee)   in any other case, the vendor for the first time became entitled to such deduction, notwithstanding the documentary proof that the vendor must be in possession of in terms of subsection (2) of this section; and

(ii)     the said period of five years contemplated in proviso (i) of this section shall be limited to six months prior to the tax period in which the deduction is made, where the Commissioner is satisfied that the deduction was not permissible in accordance with the practice generally prevailing,

and to the extent that it has not previously been deducted by the vendor under this subsection:

[First proviso substituted by section 106 of Act 35 of 2007]

Provided further that the amount of input tax which, in relation to any supply of goods or services to a vendor, the vendor may deduct in respect of any payment referred to in paragraph (a) (ii) or (b) (i) of this subsection, shall be an amount which bears to the full amount of the input tax relating to that supply the same ratio as the amount of the payment bears to the full value on which tax was payable in respect of the supply.

[Subsection (3) amended by section 71 of Act 19 of 2001, section 107 of Act 31 of 2005 and section 83 of Act 20 of 2006]

(4)     For the purposes of subsection (3), output tax in relation to a supply made by a vendor shall be attributable to a tax period-

(a)     in the case of a vendor who is in terms of section 15 required to account for tax payable on an invoice basis-

(i)      subject to the provisions of subparagraph (ii), where a supply is made or is deemed to be made by him during that tax period;

(ii)     where a supply is made under a sale concluded on or after 6 June 1996 in respect of which the provisions of section 9(3)(d) apply (other than a supply in respect of which the provisions of section 10(4) apply), to the extent that payment of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will arise in the future) relating to the purchase price for that supply has been made during that tax period; or

[Subparagraph (ii) substituted by section 32 of Act 27 of 1997]

[Paragraph (a) substituted by section 23 of Act 37 of 1996]

(b)     in the case of a vendor who is in terms of section 15 required to account for tax payable on a payments basis-

(i)      to the extent that payment of any consideration which has the effect of reducing or discharging any obligation (whether an existing obligation or an obligation which will arise in the future) relating to the purchase price has been received by the vendor during that tax period for any supply of goods or services in respect of which the provisions of section 9(1), (3) (a), (b) or (d) or (4) or 21 (2) (a) or (6) apply (other than a supply in respect of which the provisions of section 10(4) apply);

[Subparagraph (i) substituted by section 30 of Act 97 of 1993, section 16 of Act 20 of 1994, section 23 of Act 37 of 1996 and section 87 of Act 53 of 1999]

(ii)     where a supply of goods or services is made or deemed to be made during the tax period by that vendor, not being a supply of goods or services to which subparagraph (i) of this paragraph applies.

(5)     If, in relation to any tax period of any vendor, the aggregate of the amounts that may be deducted under subsection (3) from the sum referred to in that subsection, the amount (if any) refundable to the vendor under section 15(8), and any other amount refundable under Chapter 13 of the Tax Administration Act, exceeds the said sum, the amount of the excess shall, subject to the provisions of this Act, be refundable to the vendor by the Commissioner as provided in Chapter 13 of the Tax Administration Act.

[Subsection (5) substituted by section 271 of Act 28 of 2011 effective on 1 October 2012 except to the extent related to interest under section 39 in respect of which the wording prior to the amendment applies]

17. Permissible deductions in respect of input tax

(1)     Where goods or services are acquired or imported by a vendor partly for consumption, use or supply (hereinafter referred to as the intended use) in the course of making taxable supplies and partly for another intended use, the extent to which any tax which has become payable in respect of the supply to the vendor or the importation by the vendor, as the case may be, of such goods or services or in respect of such goods under section 7(3) or any amount determined in accordance with paragraph (b) or (c) of the definition of “input tax” in section 1, is input tax, shall be an amount which bears to the full amount of such tax or amount, as the case may be, the same ratio (as determined by the Commissioner in accordance with a ruling as contemplated in Chapter 7 of the Tax Administration Act or section 41B) as the intended use of such goods or services in the course of making taxable supplies bears to the total intended use of such goods or services: Provided that-

[Words preceding the proviso to subsection (1) substituted by section 271 of Act 28 of 2011 effective on 1 October 2012]

(i)      where the intended use of goods or services in the course of making taxable supplies is equal to not less than 95 per cent of the total intended use of such goods or services, the goods or services concerned may for the purposes of this Act be regarded as having been acquired wholly for the purpose of making taxable supplies;

[Paragraph (i) substituted by section 31 of Act 97 of 1993 and section 88 of Act 53 of 1999]

(ii)     where goods or services are deemed by section 9(3)(b) to be successively supplied, the extent to which the tax relating to any payment referred to in that section is input tax may be estimated where the calculation cannot be made accurately until the completion of the supply of the goods or services, and in such case such estimate shall be adjusted on completion of the supply, any amount of input tax which has been overestimated being accounted for as output tax in the tax period during which the completion occurs and any amount of input tax which has been underestimated being accounted for as input tax in that period; and

(iii)    where a method for determining the ratio referred to in this subsection has been approved by the Commissioner, that method may only be changed with effect from a future tax period, or from such other date as the Commissioner may consider equitable and such other date must fall-

(aa)  in the case of a vendor who is a taxpayer as defined in section 1 of the Income Tax Act, within the year of assessment as defined in that Act; or

(bb)   in the case of a vendor who is not a taxpayer as defined in section 1 of the Income Tax Act, within the period of twelve months ending on the last day of February, or if such vendor draws up annual financial statements in respect of a year ending other than on the last day of February, within that year,

during which the application for the aforementioned method was made by the vendor.

[Paragraph (iii) added by section 92 of Act 30 of 1998 and substituted by section 84 of Act 8 of 2007 and section 271 of Act 28 of 2011 effective on 1 October 2012]

[Subsection (1) amended by section 22 of Act 136 of 1992, section 92 of Act 30 of 1998 and section 84 of Act 8 of 2007]

(2)     Notwithstanding anything in this Act to the contrary, a vendor, shall not be entitled to deduct from the sum of the amounts of output tax and refunds contemplated in section 16(3), any amount of input tax-

(a)     in respect of goods or services acquired by such vendor to the extent that such goods or services are acquired for the purposes of entertainment: Provided that this paragraph shall not apply where-

(i)      such goods or services are acquired by the vendor for making taxable supplies of entertainment in the ordinary course of an enterprise which-

(aa)   continuously or regularly supplies entertainment to clients or customers (other than in the circumstances contemplated in item (bb)) for a consideration to the extent that such taxable supplies of entertainment are made for a charge which-

(A)    covers all direct and indirect costs of such entertainment; or

(B)    is equal to the open market value of such supply of entertainment,

unless-

(i)      such costs or open market value is for bona fide promotion purposes not charged by the vendor in respect of the supply to recipients who are clients or customers in the ordinary course of the enterprise, of entertainment which is in all respects similar to the entertainment continuously or regularly supplied to clients or customers for consideration; or

(ii)     the goods or services were acquired by the vendor for purposes of making taxable supplies to such clients or customers of entertainment which consists of the provision of any food and a supply of any portion of such food is subsequently made to any employee of the vendor or to any welfare organization as all such food was not consumed in the course of making such taxable supplies;

[Item (aa) amended by section 84 of Act 20 of 2006]

(bb)   supplies entertainment to any employee or office holder of the vendor or any connected person in relation to the vendor, to the extent that such taxable supplies of entertainment are made for a charge which covers all direct and indirect costs of such entertainment;

[Paragraph (i) substituted by section 31 of Act 136 of 1991 and section 33 of Act 27 of 1997]

(ii)     such goods or services are acquired by the vendor for the consumption or enjoyment by that vendor (including, where the vendor is a partnership, a member of such partnership), an employee, office holder of such vendor, or a self-employed natural person in respect of a meal, refreshment or accommodation, in respect of any night that such vendor or member is by reason of the vendor’s enterprise or, in the case of such employee, office holder or self-employed natural person, he or she is by reason of the duties of his or her employment, office or contractual relationship, obliged to spend away from his or her usual place of residence and from his or her usual working-place. For the purposes of this section, the term ‘self-employed natural person’ shall mean a person to whom an amount is paid or is payable in the course of any trade carried on by him or her independently of the person by whom such amount is paid or payable and of the person to whom the services have been or are to be rendered, as contemplated in the proviso to paragraph (ii) of the exclusions to the definition of ‘remuneration’ in paragraph 1 of the Fourth Schedule to the Income Tax Act;

[Paragraph (ii) substituted by section 22 of Act 136 of 1992, section 33 of Act 27 of 1997 and section 84 of Act 20 of 2006]

(iii)    such goods or services consist of entertainment supplied by the vendor as operator of any conveyance to a passenger or crew member, in such conveyance during a journey, where such entertainment is supplied as part of or in conjunction with the transport service supplied by the vendor, where the supply of such transport service is a taxable supply;

[Subparagraph (iii) substituted by section 173 of Act 45 of 2003, section 102 of Act 32 of 2004 and section 174 of Act 31 of 2013 effective on 1 April 2014]

(iv)    such goods or services consist of a meal or refreshment supplied by the vendor as organizer of a seminar or similar event to a participant in such seminar or similar event, the supply of such meal or refreshment is made during the course of or immediately before or after such seminar or similar event and a charge which covers the cost of such meal or refreshment is made by the vendor to the recipient;

[Paragraph (iv) substituted by section 22 of Act 136 of 1992]

(v)   such goods or services are acquired by a municipality for the purpose of providing sporting or recreational facilities or public amenities to the public;

[Paragraph (v) substituted by section 31 of Act 97 of 1993 and section 48 of Act 9 of 2006]

(vi)  such goods or services are acquired by a welfare organization, for the purpose of making supplies in the furtherance of its aims and objects; or

[Paragraph (vi) added by section 31 of Act 136 of 1991]

(vii)   such goods or services are acquired by a vendor for an employee or office holder of such vendor, that are incidental to the admission into a medical care facility;

[Subparagraph (vii) added by section 173 of Act 45 of 2003, substituted by section 102 of Act 32 of 2004 and amended by section 108 of Act 31 of 2005]

(viii) such goods or services consist of a meal or refreshment supplied by the vendor as operator of any ship or vessel (otherwise than in the circumstances contemplated in subparagraph (iii)) in such ship or vessel to a crew member of such ship or vessel, where such meal refreshment is supplied in the course of making a taxable supply by that vendor; or

[Subparagraph (viii) added by section 102 of Act 32 of 2004 and amended by section 108 of Act 31 of 2005]

(ix) that entertainment is acquired by the vendor for the purpose of awarding that entertainment as a prize contemplated in section 16(3)(d) in consequence of a supply contemplated in section 8(13);

[Subparagraph (ix) added by section 108 of Act 31 of 2005]

[Paragraph (a) amended by section 31 of Act 97 of 1993]

(b)     in respect of any fees or subscriptions paid by the vendor in respect of membership of any club, association or society of a sporting, social or recreational nature; or

(c)     in respect of any motor car supplied to or imported by the vendor: Provided that-

(i)      this paragraph shall not apply where that motor car is acquired by the vendor exclusively for the purpose of making a taxable supply of that motor car in the ordinary course of an enterprise which continuously or regularly supplies motor cars, whether that supply is made by way of sale or under an instalment credit agreement or by way of rental agreement at an economic rental consideration;

(ii)     for the purposes of this paragraph a motor car acquired by such vendor for demonstration purposes or for temporary use prior to a taxable supply by such vendor shall be deemed to be acquired exclusively for the purpose of making a taxable supply; and

(iii) this paragraph shall not apply where-

(aa)   that motor car is acquired by the vendor for the purposes of awarding that motor car as a prize contemplated in section 16(3)(d) in consequence of a supply contemplated in section 8(13); or

(bb)   the supply of that motor car is in the ordinary course of an enterprise which continuously or regularly supplies motor cars as prizes to clients or customers (other than to any employee or office holder of the vendor or any connected person in relation to that employee, office holder or vendor) to the extent that it is in consequence of a taxable supply made in the course or furtherance of an enterprise; or

[Paragraph (c) amended by section 108 of Act 31 of 2005]

(d)     in respect of any goods or services acquired by a superannuation scheme referred to in section 2, for the purposes of the supply by such scheme of any medical or dental services or services directly connected with such medical or dental services or of any goods necessary for or subordinate or incidental to the supply of any such services.

[Paragraph (d) added by section 22 of Act 136 of 1992 and substituted by section 17 of Act 20 of 1994]

[Subsection (2) amended by section 108 of Act 31 of 2005 and section 84 of Act 8 of 2007]

(2A)  Subsection (2) shall not apply to input tax in respect of goods or services that are applied in the course or furtherance of a foreign donor funded project.

[Subsection (2A) inserted by section 84 of Act 20 of 2006 and substituted by section 84 of Act 8 of 2007 and section 31 of Act 36 of 2007]

(3)     Notwithstanding anything in section 16 (4), where a vendor has made a supply of goods as contemplated in section 8(10) and in respect of the acquisition thereof by the vendor a deduction of input tax under section 16 (3) was denied in terms of subsection (2) of this section, the vendor shall not be required to account for output tax in relation to such supply.

(4)     Where, but for the provisions of this subsection, an amount qualifies or has qualified for a deduction under more than one provision of this Act, a deduction of such amount, or any portion thereof, shall not be made more than once in the calculation of the amount of tax payable by any person.

[Subsection (4) added by section 33 of Act 27 of 1997]

18. Change in use adjustments

[Heading substituted by section 103 of Act 32 of 2004]

(1)     Subject to the provisions of section 8(2), where-

(a)     goods or services have been supplied to or imported by a vendor; or

(b)     goods have been manufactured, assembled, constructed or produced by him; or

(c)     goods or services were deemed by subsection (4) to have been supplied to him,

(excluding goods or services to the extent that, in respect of the acquisition of which by the vendor a deduction of input tax was denied by section 17(2) or would have been denied if that section had been applicable prior to the commencement date) and such goods or services were acquired, manufactured, assembled, constructed or produced by such vendor wholly or partly for the purpose of consumption, use or supply in the course of making taxable supplies or such goods were held or applied for that purpose, such goods or services shall-

(i)      if they are subsequently applied by him (otherwise than in the circumstances contemplated in section 8(9)) wholly for a purpose other than the said purpose; or

(ii)     if they are subsequently applied by him wholly for a purpose in respect of which, if such goods or services had been acquired by him at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)(a) or (c),

be deemed to have been supplied by him by way of a taxable supply by him in the course of his enterprise.

[Subsection (1) amended by section 32 of Act 136 of 1991 and section 34 of Act 27 of 1997]

(2)     Where-

(a)     capital goods or services have been supplied to or imported by a vendor; or

[Paragraph (a) substituted by section 23 of Act 136 of 1992]

(b)     capital goods have been manufactured, assembled, constructed or produced by him; or

[Paragraph (b) substituted by section 23 of Act 136 of 1992]

(c)     capital goods or services were deemed by subsection (4) to have been supplied to him,

[Paragraph (c) substituted by section 23 of Act 136 of 1992]

(excluding goods or services to the extent that, in respect of the acquisition of which by the vendor a deduction of input tax was denied by section 17(2) or would have been denied if that section had been applicable prior to the commencement date) and such goods or services were acquired, manufactured, assembled, constructed or produced by such vendor wholly or partly for the purpose of consumption, use or supply in the course of making taxable supplies or such goods were held or applied for that purpose, such goods or services shall, if the extent of the application or use of such goods or services in the course of making taxable supplies (in respect of which, if such goods or services had been acquired at the time of such application or use, a deduction of input tax would not have been denied in terms of section 17(2)(a)) is subsequently reduced in relation to their total application or use, be deemed to have been supplied by him by way of a taxable supply by him in the course of his enterprise at the time at which such reduction is deemed by subsection (6) to take place:

Provided that this subsection does not apply to –

(i)      capital goods or services which have an adjusted cost of less than R40 000 (excluding tax) or where such goods or services were deemed to be supplied to the vendor by subsection (4) if the amount which was represented by ‘B’ in the formula contem­plated in that subsection was less than R40 000 when such goods or services were deemed to be supplied to such vendor;

[Paragraph (i) amended by section 49 of Act 9 of 2006]

(ii)     capital goods or services acquired by a public authority or public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), if the goods or services were acquired prior to 1 April 2005 or if an input tax deduction in respect thereof was denied under proviso (iv) to section 18(4); or

[Paragraph (ii) amended by section 49 of Act 9 of 2006]

(iii)    capital goods or services acquired by a municipality, if the goods or services were acquired prior to 1 July 2006 or if an input tax deduction in respect thereof was denied in terms of paragraph (v) of the proviso to section 18(4).

[Paragraph (iii) added by section 49 of Act 9 of 2006]

[Subsection (2) amended by section 32 of Act 136 of 1991, section 34 of Act 27 of 1997, section 174 of Act 45 of 2003 and section 109 of Act 31 of 2005 effective on 1 April 2005]

(3)     Notwithstanding anything in this section, to the extent that any vendor has or is deemed to have granted a benefit or advantage to an employee or the holder of any office as contemplated in paragraph (i) of the definition of “gross income” in section 1 of the Income Tax Act, read with the Seventh Schedule to that Act, and such benefit or advantage consists of a supply of goods or services, the granting of that benefit or advantage shall be deemed to be a supply of goods or services made by the vendor in the course of an enterprise carried on by the vendor: Provided that this subsection shall not apply to any such benefit or advantage to the extent that it has arisen by virtue of any supply of goods or services which is an exempt supply in terms of section 12 of this Act or is a supply which is charged with tax at the rate of zero per cent in terms of section 11 of this Act or is a supply of entertainment: Provided further that this subsection shall not apply to any such benefit or advantage to the extent that it is granted by the vendor in the course of making exempt supplies.

[Subsection (3) substituted by section 32 of Act 136 of 1991]

(4)     Where-

(a)

(i)    goods or services have been supplied to or imported by a person prior to the commencement date; or

(ii)   goods have been manufactured, assembled, constructed or produced by him prior to the commencement date,

and such goods or services were acquired, manufactured, assembled, constructed or produced or applied by such person wholly for purposes other than that of consumption, use or supply in the course of making supplies in the course of an activity which was an enterprise or would have been an enterprise if section 1 had been applicable prior to the date of promulgation of this Act or for a purpose in respect of which a deduction of input tax in respect of such goods or services would have been denied in terms of section 17(2) if that section had been applicable prior to the commencement date; or

[Paragraph (a) amended by section 34 of Act 27 of 1997]

(b)

(i)      goods or services have been supplied to or imported by a person on or after the commencement date and tax has been charged in respect of such supply or importation; or

[Subparagraph (i) substituted by section 18 of Act 20 of 1994]

(ii)     goods have been manufactured, assembled, constructed or produced by him on or after the commencement date and tax has been charged in respect of the supply of goods or services acquired by him for the purpose of such manufacturing, assembling, construction or production; or

[Subparagraph (ii) substituted by section 18 of Act 20 of 1994]

(iii)  goods or services are deemed by subsection (1) or section 8(2) to have been supplied by him,

[Subparagraph (iii) substituted by section 18 of Act 20 of 1994]

and no deduction has been made in terms of section 16(3) in respect of or in relation to such goods or services; or

[Paragraph (b) amended by section 34 of Act 27 of 1997]

(c)     second-hand goods situated in the Republic have been supplied (otherwise than under a taxable supply) to a person under a sale on or after the commencement date by a resident of the Republic and no deduction has been made in terms of section 16 (3) in respect of such second-hand goods; and

[Paragraph (c) inserted by section 18 of Act 20 of 1994]

such goods or services are subsequent to the commencement date applied in any tax period by that person or, where he is a member of a partnership, by the partnership, wholly or partly for consumption, use or supply in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)), those goods or services shall be deemed to be supplied in that tax period to that person or the partnership, as the case may be, and the Commissioner shall allow that person or the partnership, as the case may be, to make a deduction in terms of section 16(3) of an amount determined in accordance with the formula

A x B x C x D,

in which formula-

“A”   represents the tax fraction;

“B”   represents the lesser of-

(i)      the adjusted cost (including any tax forming part of such adjusted cost) to the vendor of the acquisition, manufacture, construction or production of those goods or services: Provided that where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of section 10(4) deemed to be the open market value of the supply, the adjusted cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply; or

[Subparagraph (i) substituted by section 32 of Act 97 of 1993 and section 174 of Act 45 of 2003]

(ii)     the open market value of the supply of those goods or services at the time when the supply is deemed to be made:

“C”   represents the ratio that, immediately after the supply so deemed to be made, the intended use of the goods or services (as contemplated in section 17(1)) in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) bears to the total intended use of those goods or services, expressed as a percentage: Provided that where the intended use of goods or services in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) is equal to not less than 95 per cent of the total intended use of such goods or services such percentage shall be deemed to be 100 per cent; and

[Definition of “C” substituted by section 34 of Act 27 of 1997 and amended by section 89 of Act 53 of 1999]

“D”   where paragraph (c) applies, represents the ratio that the amount paid, which payment reduces or discharges any obligation (whether an existing obligation or an obligation which will arise in future) in respect of or consequent upon, whether directly or indirectly, the consideration in money for the supply of second-hand goods, bears to the total consideration in money, expressed as a percentage:

[Definition of “D” substituted by section 93 of Act 30 of 1998 and section 138 of Act 24 of 2011 with effect from 10 January 2012]

Provided that-

(i)      paragraph (b) of this subsection shall not apply where a vendor has, only as a result of not complying with the provisions of section 16(2), not been entitled to make a deduction of input tax in terms of section 16(3);

(ii)      ..…….

[Paragraph (ii) of the proviso deleted by section 149 of Act 22 of 2012 effective on 10 January2012]

(iii)  ……….

[Paragraph (iii) of the proviso amended by section 103 of Act 32 of 2004 and section 49 of Act 9 of 2006 and deleted by section 149 of Act 22 of 2012 effective on 10 January2012]

(iv)    this subsection shall not apply where a constitutional institution listed in Schedule 1 or a public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), is re-classified within the Schedules to the Public Finance Management Act, 1999 (Act No. 1 of 1999) and applies those goods or services for the purposes of consumption, use or supply in the course of making taxable supplies; or

[Paragraph (iv) added by section 103 of Act 32 of 2004 and amended by section 49 of Act 9 of 2006]

(v)     this subsection shall not apply where a municipality applies goods or services acquired before 1 July 2006 for the purposes of consumption, use or supply in the course of making taxable supplies on or after 1 July 2006.

[Paragraph (v) added by section 49 of Act 9 of 2006]

[Subsection (4) amended by section 32 of Act 136 of 1991, section 23 of Act 136 of 1992, section 18 of Act 20 of 1994 and section 34 of Act 27 of 1997]

(5)     Where-

(a)     capital goods or services have been supplied to or imported by a vendor; or

(b)     capital goods have been manufactured, assembled, constructed or produced by him; or

(c)     capital goods or services are deemed by subsection (4) to have been supplied to him,

and such goods or services were acquired, manufactured, assembled, constructed or produced or applied by such vendor partly for the purpose of consumption, use or supply in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) or of making supplies in the course of an activity which was an enterprise or would have been an enterprise if section 1 had been applicable prior to the date of promulgation of this Act (other than supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2) if that section had been applicable prior to the commencement date) such goods or services shall, if the extent of the application or use of such goods or services in the course of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) is subsequent to the commencement date increased in relation to their total application or use, be deemed to be supplied to him, and the Commissioner shall allow the vendor to make a deduction in terms of section 16(3), in the tax period during which such increase is deemed by subsection (6) to take place, of an amount determined in accordance with the formula

A x B x (C – D),

in which formula-

“A”   represents the tax fraction;

“B”   represents the lesser of-

(i)

(aa)   the adjusted cost (including any tax forming part of such adjusted cost) to   the vendor of the acquisition, manufacture, assembly, construction or production of those goods or services: Provided that where the goods or services were acquired under a supply in respect of which the consideration in money was in terms of section 10(4) deemed to be the open market value of the supply, the adjusted cost of those goods or services shall be deemed to include such open market value to the extent that it exceeds the consideration in money for that supply; or

[Subparagraph (aa) substituted by section 32 of Act 136 of 1991, section 32 of Act 97 of 1993 and section 174 of Act 45 of 2003]

(bb)   where goods or services were deemed by subsection (4) to have been supplied to the vendor, the amount which was represented by “B” in the formula contemplated in that subsection when such goods or services were deemed to be supplied to the vendor; or

(cc)    where the vendor was at some time after the acquisition of the goods or services required to make an adjustment contemplated in subsection (2) or this subsection the amounts represented by “A” in the formula contemplated in section 10(9) or by “B” in the formula contemplated in this subsection respectively, in the most recent adjustment made under subsection (2) or this subsection by the vendor prior to such supply of goods or services so deemed to be made; and

(ii)   the open market value of the supply of those goods or services at the time any increase in the extent of the use or application of the goods or services is deemed by subsection (6) to take place;

“C”   represents the percentage that, during the 12 month period during which the increase in use or application of the goods or services is deemed to take place, the use or application of the goods or services for the purposes of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) was of the total use or application of the goods: Provided that where the said percentage does not exceed the percentage contemplated in “D” by more than 10 per cent of the total use or application, the said percentage shall be deemed to be the percentage determined in “D”;

[Definition of “C” amended by section 32 of Act 136 of 1991 and section 34 of Act 27 of 1997]

“D”   represents the percentage that the use or application of the goods or services for the purposes of making taxable supplies (other than taxable supplies in respect of which, if such goods or services had been acquired at the time of such application, a deduction of input tax would have been denied in terms of section 17(2)) was of the total use or application of such goods or services determined in terms of section 17(1), section 10(9) or subsection (4) of this section or this subsection, whichever was applicable in the period immediately preceding the 12 month period contemplated in “C”:

[Definition of “D” substituted by section 34 of Act 27 of 1997]

Provided that –

(i)     this subsection does not apply to-

(aa)   capital goods or services which cost less than R40 000 (excluding tax) or where such goods or services were deemed to be supplied to the person by subsection (4) if the amount which was represented by “B” in the formula contemplated in that subsection was less than R40 000 when such goods or services were deemed to be supplied to such person;

[Subparagraph (aa) amended by section 49 of Act 9 of 2006]

(bb)   capital goods or services acquired by a public authority or public entity listed in Part A or C of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999, prior to 1 April 2005, or if an input tax deduction in respect thereof was denied under proviso (iv) to section 18(4); or

[Subparagraph (bb) amended by section 49 of Act 9 of 2006]

(cc)   capital goods or services acquired by a municipality prior to 1 July 2006, or if an input tax deduction in respect thereof was denied in terms of paragraph (v) of the proviso to section 18(4);

[Subparagraph (cc) added by section 49 of Act 9 of 2006]

(ii)   ……….

[Para (ii) of the proviso deleted by section 149 of Act 22 of 2012 effective on 10 January 2012]

[Subsection (5) amended by section 32 of Act 136 of 1991, section 23 of Act 136 of 1992, section 34 of Act 27 of 1997 and section 109 of Act 31 of 2005]

(6)     For the purposes of subsections (2) and (5), any reduction or increase in the extent of the application or use of goods or services shall be deemed to take place on the last day of the vendor’s ‘year of assessment’, as defined in section 1 of the Income Tax Act, or, if the vendor is not a taxpayer as defined in that section, on the last day of February: Provided that where a vendor who is not a taxpayer as so defined draws up annual financial statements in respect of a year or other period ending on a date other than the last day of February, the reduction or increase in the extent of the application or use of goods or services shall be deemed to take place on such first-mentioned date: Provided further that where a vendor ceases to be a vendor prior to any day contemplated in this subsection, any reduction or increase in the extent of the application or use of goods or services shall be deemed to take place immediately before that vendor ceased to be a vendor.

[Words preceding the proviso substituted by section 135 of Act 25 of 2015 effective on 8 January 2016]

[Subsection (6) substituted by section 92 of Act 17 of 2009]

(7)     For the purposes of subsections (2) and (5) of this section, the extent of the application or use of any goods or services for the purpose of making taxable supplies shall be determined with reference to the application or use of such goods or services during the 12 month period ending on the day any reduction or increase in the extent of the application or use of such goods or services is deemed by subsection (6) to have taken place: Provided that where any goods or services are acquired, manufactured, assembled, constructed or produced by a vendor or are deemed under subsection (4) to have been supplied to that vendor during such 12 month period, the extent of the application or use of such goods or services shall be determined with reference to the period ending on the day contemplated in subsection (6) and commencing on the date such goods or services are acquired, manufactured, assembled, constructed or produced by the vendor or are deemed to be supplied to the vendor under subsection (4): Provided further that where the period between the commencement date and the date contemplated in subsection (6) is less than a 12 month period it shall for the purposes of this section be deemed to be a 12 month period.

(8)     Where a deduction of an amount contemplated in paragraph (b) of the definition of “input tax” in section 1 has been made by any vendor in respect of the sale to him of any second-hand goods and subsequently-

(a)     that sale is cancelled; or

(b)     the nature of that sale is fundamentally varied or altered; or

(c)     the previously agreed consideration for that sale is reduced; or

(d)     the second-hand goods or part of the second-hand goods sold are returned to the supplier,

and, as a result of the occurrence of one or more of the abovementioned events, the input tax actually deducted in relation to such sale exceeds the input tax properly deductible by the vendor, either the amount of that excess shall be deemed to be tax charged in relation to a taxable supply made by that vendor in the tax period during which the said event has occurred, at the rate of tax which applied when the said deduction was made, or the amount of input tax deducted in terms of section 16 (3) in the said tax period shall be reduced by the amount of the said excess.

[Subsection (8) added by section 18 of Act 20 of 1994]

(9)     Where a vendor has acquired or imported a motor car (in respect of which input tax has been denied in terms of section 17(2)(c)) and has subsequently converted that motor car into a game viewing vehicle or a hearse, as contemplated in paragraph (e) or (f) of the definition of ‘motor car’ in section 1, that motor car is deemed to be supplied in that tax period to that vendor, and the Commissioner shall allow that vendor to make a deduction in terms of section 16(3) of an amount equal to the tax fraction of the lesser of-

(a)     the adjusted cost; or

(b)     the open market value,

of that motor car on the day before that conversion: Provided that this deduction excludes any amount of input tax which qualifies or has qualified for a deduction under another provision of this Act.

[Subsection (9) added by section 103 of Act 32 of 2004]

(10)   Where-

(a)     goods or services have been supplied by a vendor at the zero rate in terms of sections 11(1)(c), 11(1)(m), 11(1)(mA) or 11(2)(k) to a vendor, that is a customs controlled area enterprise or an SEZ operator; or

(b)     goods have been imported into the Republic by a vendor, being a customs controlled area enterprise or an SEZ operator and those goods are exempt from tax in terms of section 13(3),

and where a deduction of input tax would have been denied in terms of section 17(2), or  to the extent that such goods or services are not wholly for consumption, use or supply within a customs controlled area in the course of making taxable supplies by that vendor, that is a customs controlled area enterprise or an SEZ operator, those goods or services shall be deemed to be supplied by the  vendor concerned in the same tax period in which they were so acquired, in accordance with the formula:

A × B

in which formula-

‘A’ represents the rate of tax levied in terms of section 7(1); and

‘B’ represents-

(i)      the cost to the vendor of the acquisition of those goods or services which were supplied to him or her in terms of sections 11(1)(c), 11(1)(m), 11(1)(mA) or 11(2)(k); or

(ii)     the value to be placed on the importation of goods into the Republic as determined in terms of section 13(2).

[Subsection (10) added by section 103 of Act 32 of 2004, amended by section 109 of Act 31 of 2005, substituted by section 85 of Act 20 of 2006, amended by section 149 of Act 22 of 2012 and substituted by section 27 of Act 16 of 2016 effective on the date on which the Special Economic Zones Act, 2014 (Act No. 16 of 2014), came into operation, 9 February 2016]

18A.  Adjustments in consequence of acquisition of going concern wholly or partly for purposes other than making taxable supplies

(1)     Where-

(a)     an enterprise or part of an enterprise has been supplied to any vendor; and

(b)     the supply of such enterprise or part was charged with tax at the rate of zero per cent in terms of section 11(1)(e); and

(c)     such enterprise or part, as the case may be, or any goods or services which formed part of such enterprise or part are acquired by such vendor wholly or partly for a purpose other than for consumption, use or supply in the course of making taxable supplies,

such enterprise, part, goods or services, as the case may be, shall be deemed to have been supplied by him by way of a taxable supply by him in the course of his enterprise: Provided that where the intended use of such enterprise, part, goods or services, as the case may be, in the course of making taxable supplies is equal to not less than 95 per cent of the total intended use of such enterprise, part, goods or services, as the case may be, the enterprise, part, goods or services concerned may for the purposes of this Act be regarded as having been acquired wholly for the purpose of consumption, use or supply in the course of making taxable supplies.

[Subsection (1) amended by section 19 of Act 20 of 1994 and section 90 of Act 53 of 1999]

(2)     Notwithstanding anything in this Act, the value of the supply deemed by subsection (1) to have been made by the vendor, shall be the full cost to such vendor of acquiring such enterprise, part, goods or services, as the case may be, reduced by an amount which bears to the amount of such full cost the same ratio as the intended use or application of the enterprise, part, goods or services in the course of making taxable supplies bears to the total intended use or application of the enterprise, part, goods or services: Provided that-

(i)      the cost to such vendor of acquiring such enterprise, part, goods or services may be reduced by any amount which represents an appropriate allocation of such full cost to the acquisition of any goods or services which form part of such enterprise or part of an enterprise and in respect of the acquisition of which by the vendor a deduction of input tax would be denied in terms of section 17(2); or

(ii)     where such enterprise, part, goods or services were acquired-

(aa)  by means of a supply made by a vendor for no consideration or for a consideration in money which is less than the open market value of the supply; and

(bb) in circumstances where the supplier and the recipient are connected persons,

the cost of such enterprise, part, goods or services shall be deemed to be the open market value of the supply of such enterprise, part, goods or services.

[Subsection (2) amended by section 24 of Act 37 of 1996]

(3)     Notwithstanding anything in this Act, the supply deemed by subsection (1) to have been made by the vendor shall be deemed to be made in the tax period in which the supply of the enterprise or part of an enterprise is made.

(4)     For the purposes of this section and sections 10(9), 18(4) and (5), the cost to the vendor of any goods or services acquired by a vendor in the circumstances contemplated in subsection (1) shall be deemed to be an amount equal to the aggregate of an amount which represents an appropriate allocation of the full cost to the vendor of the enterprise or part of an enterprise to those specific goods or services and an amount determined by applying the rate of tax applicable at the time of supply contemplated in subsection (3) to the amount of such appropriate allocation.

[Section 18A inserted by section 24 of Act 136 of 1992]

18B.  Temporary letting of residential fixed property (ceases to apply on 1 January 2018)

(1)     For the purposes of this section “developer” means a vendor who continuously or regularly constructs, extends or substantially improves fixed property consisting of any dwelling or continuously or regularly constructs, extends or substantially improves parts of that fixed property for the purpose of disposing of that fixed property after the construction, extension or improvement.

(2)     Notwithstanding the provisions of section 18(1), where goods being fixed property consisting of any dwelling-

(a)     is developed by a vendor who is a developer wholly for the purpose of making taxable supplies or is held or applied for that purpose; and

(b)     is subsequently temporarily applied by that vendor for supplying accommodation in a dwelling under an agreement for the letting and hiring thereof,

the supply of such fixed property shall, subject to subsection (3), be deemed not to be a taxable supply in the course or furtherance of that vendor’s enterprise.

(3)     The fixed property contemplated in subsection (2) shall be deemed to have been supplied by that vendor by way of a taxable supply for a consideration as contemplated in section 10(7) in the course or furtherance of that vendor’s enterprise at the earlier of-

(a)     a period of 36 months after the conclusion of the agreement contemplated in subsection (2)(b); or

(b)     the date that the vendor applies that fixed property permanently for a purpose other than that of making taxable supplies.

(4)     ……….

[Subsection (4) deleted by section 174 of Act 31 of 2013 effective on 10 January 2012]

[Section 18B inserted by section 139 of Act 24 of 2011 with effect from 10 January 2012 and ceases to apply on 1 January 2018 – date of cessation in section 139 of Act 24 of 2011, as substituted by section 111 of Act 43 of 2014]

18C. Adjustments for leasehold improvements

Where goods have been supplied to a vendor, being a lessor, as contemplated in section 8(29), the lessor shall be deemed to have made a taxable supply in the course or furtherance of the lessor’s enterprise, and where a deduction of input tax would have been denied in terms of section 17(2), or to the extent that such goods are not wholly for consumption, use or supply in the course of making taxable supplies by that lessor, those goods shall be deemed to be supplied by the lessor at the time the leasehold improvements are completed, in accordance with the formula-

A × B × C

in which formula—

“A”     represents the tax fraction;

“B”    represents the amount stipulated in the agreement or if no amount is stipulated, the open market value as stipulated in section 3 applies, and

“C”    represents the percentage of the use or application of the goods for the purposes of making other than taxable supplies at the time the leasehold improvements are completed.

[Section 18C inserted by section 84(1) of Act 17 of 2017 effective on 1 April 2018]

(1)    For the purposes of this section-

(a)    “developer” means a vendor who continuously or regularly constructs, extends or substantially improves fixed property consisting of any dwelling or continuously or regularly constructs, extends or substantially improves parts of that fixed property for the purpose of disposing of that fixed property after the construction, extension or improvement; and

(b)     “temporarily applied” means the application of fixed property or a portion of a fixed property in supplying accommodation in a dwelling under an agreement or more than one agreement for letting and hiring thereof which agreement or agreements relate to a combined total period not exceeding 12 months: Provided that “temporarily applied” does not include the application of fixed property in supplying accommodation in a dwelling under an agreement for the letting and hiring thereof where any such agreement is for a fixed period exceeding 12 months, in which case this section will not apply, but the provisions of section 18(1) shall apply.

(2)     Notwithstanding the provisions of section 18(1), where goods being supplied consist of fixed property consisting of any dwelling and such fixed property—

(a)     is developed by a vendor who is a developer wholly for the purpose of making taxable supplies or is held or applied for that purpose by that vendor; and

(b)     is subsequently temporarily applied by that vendor in accordance with section 12(c),

such fixed property shall be deemed to have been supplied by that vendor by way of a taxable supply for the consideration contemplated in section 10(29) and shall take place in accordance with section 9(13).

(3)     Where a vendor who is a developer subsequently supplies fixed property contemplated in subsection (2)(b) by way of a sale within the period that the fixed property is temporarily applied, such supply shall be a taxable supply in the course or furtherance of the vendor’s enterprise and shall take place in accordance with section 9(3)(d).

(4)     Where fixed property contemplated in subsection (3) is supplied by that vendor, the supply shall be deemed to be made for a consideration as contemplated in section 10(2).

(5)      Where fixed property-

(a)     contemplated in subsection (3) is supplied by that vendor within the “temporarily applied” period; or

[Paragraph (a) substituted by section 50(1)(a) of Act 17 of 2023 effective on 1 April, 2024]

(b)     is temporarily applied as contemplated in subsection (2)(b) and is no longer applied in supplying accommodation in a dwelling immediately after the expiry of the “temporarily applied” period;

[Paragraph (b) substituted by section 50(1)(b) of Act 17 of 2023 effective on 1 April, 2024]

(c)     . . . . . .

[Paragraph (c) substituted by section 30(1) of Act 20 of 2022 and deleted by section 50(1)(c) of Act 17 of 2023 effective on 1 April, 2024]

the Commissioner shall allow such vendor a deduction in terms of section 16(3)(o), and the deduction so made shall be deemed for the purpose of that section to be input tax.

(6)     The fixed property contemplated in subsection (2)(b) shall be deemed to have been supplied by the developer by way of a taxable supply under section 18(1) for a consideration as contemplated in section 10(7) in the course or furtherance of that vendor’s enterprise at the earlier of-

(a)     the time that the temporary letting period of 12 months has been exceeded; or

(b)     the time that the vendor applies that fixed property permanently for a purpose other than that of making taxable supplies:

Provided that this provision shall not apply if, during the period that the property is “temporarily applied”, a written agreement for the taxable supply of the property has been concluded and the transfer of that property only occurs after the expiry of the said period. In such a case, the sale of the property concerned will be a taxable supply at the time contemplated in section 9(3)(d).

[Subsection (6) added by section 50(1)(d) of Act 17 of 2023 effective on 1 April, 2024]

[Section 18D inserted by section 54(1) of Act 20 of 2021 effective on 1 April, 2022]

18D.     Temporary letting of residential property

(1)    For the purposes of this section-

(a)    “developer” means a vendor who continuously or regularly constructs, extends or substantially improves fixed property consisting of any dwelling or continuously or regularly constructs, extends or substantially improves parts of that fixed property for the purpose of disposing of that fixed property after the construction, extension or improvement; and

(b)     “temporarily applied” means the application of fixed property or a portion of a fixed property in supplying accommodation in a dwelling under an agreement or more than one agreement for letting and hiring thereof which agreement or agreements relate to a combined total period not exceeding 12 months: Provided that “temporarily applied” does not include the application of fixed property in supplying accommodation in a dwelling under an agreement for the letting and hiring thereof where any such agreement is for a fixed period exceeding 12 months, in which case this section will not apply, but the provisions of section 18(1) shall apply.

(2)     Notwithstanding the provisions of section 18(1), where goods being supplied consist of fixed property consisting of any dwelling and such fixed property—

(a)     is developed by a vendor who is a developer wholly for the purpose of making taxable supplies or is held or applied for that purpose by that vendor; and

(b)     is subsequently temporarily applied by that vendor in accordance with section 12(c),

such fixed property shall be deemed to have been supplied by that vendor by way of a taxable supply for the consideration contemplated in section 10(29) and shall take place in accordance with section 9(13).

(3)     Where a vendor who is a developer subsequently supplies fixed property contemplated in subsection (2)(b) by way of a sale within the period that the fixed property is temporarily applied, such supply shall be a taxable supply in the course or furtherance of the vendor’s enterprise and shall take place in accordance with section 9(3)(d).

(4)     Where fixed property contemplated in subsection (3) is supplied by that vendor, the supply shall be deemed to be made for a consideration as contemplated in section 10(2).

(5)      Where fixed property-

(a)     contemplated in subsection (3) is supplied by that vendor within the “temporarily applied” period; or

[Paragraph (a) substituted by section 50(1)(a) of Act 17 of 2023 effective on 1 April, 2024]

(b)     is temporarily applied as contemplated in subsection (2)(b) and is no longer applied in supplying accommodation in a dwelling immediately after the expiry of the “temporarily applied” period;

[Paragraph (b) substituted by section 50(1)(b) of Act 17 of 2023 effective on 1 April, 2024]

(c)     . . . . . .

[Paragraph (c) substituted by section 30(1) of Act 20 of 2022 and deleted by section 50(1)(c) of Act 17 of 2023 effective on 1 April, 2024]

the Commissioner shall allow such vendor a deduction in terms of section 16(3)(o), and the deduction so made shall be deemed for the purpose of that section to be input tax.

(6)     The fixed property contemplated in subsection (2)(b) shall be deemed to have been supplied by the developer by way of a taxable supply under section 18(1) for a consideration as contemplated in section 10(7) in the course or furtherance of that vendor’s enterprise at the earlier of-

(a)     the time that the temporary letting period of 12 months has been exceeded; or

(b)     the time that the vendor applies that fixed property permanently for a purpose other than that of making taxable supplies:

Provided that this provision shall not apply if, during the period that the property is “temporarily applied”, a written agreement for the taxable supply of the property has been concluded and the transfer of that property only occurs after the expiry of the said period. In such a case, the sale of the property concerned will be a taxable supply at the time contemplated in section 9(3)(d).

[Subsection (6) added by section 50(1)(d) of Act 17 of 2023 effective on 1 April, 2024]

[Section 18D inserted by section 54(1) of Act 20 of 2021 effective on 1 April, 2022]

19. Goods or services acquired before incorporation

Any company, being a vendor, shall, where any amount of tax has been charged in terms of section 7 in relation to the acquisition of goods or services for or on behalf of that company or in connection with the incorporation of that company, and those goods or services were acquired prior to incorporation by a person who-

(a)     was reimbursed by the company for the whole amount of the consideration paid for the goods or services; and

(b)     acquired those goods or services for the purpose of an enterprise to be carried on by the company and has not used those goods or services for any purpose other than carrying on such enterprise,

be deemed to be the recipient of the goods or services and to have paid the tax so charged as if the supply or the payment of the tax had been made during the tax period in which the reimbursement referred to in paragraph (a) is made: Provided that this section shall not apply in relation to any goods or services where-

(i)      the supply of those goods or services by that person to the company is a taxable supply, or is a supply of second-hand goods not being a taxable supply; or

(ii)     those goods or services were so acquired more than six months prior to the date of incorporation of the company; or

(iii)    the company does not hold sufficient records to establish the particulars relating to the deduction to be made.

20. Tax invoices

(1)     Except as otherwise provided in this section, a supplier, being a registered vendor, making a taxable supply (other than a supply contemplated in section 8(10)) to a recipient, must within 21 days of the date of that supply issue a tax invoice containing such particulars as are specified in this section: Provided that-

(i)      it shall not be lawful to issue more than one tax invoice for each taxable supply;

(ii)     if a vendor claims to have lost the original tax invoice, the supplier or the recipient, as the case may be, may provide a copy clearly marked “copy”.

[Subsection (1) amended by section 91 of Act 53 of 1999 and section 104 of Act 32 of 2004]

(1A) ……….

[Subsection (1A) inserted by section 157 of Act 60 of 2001 and deleted by section 104 of Act 32 of 2004]

(1B) Where a tax invoice contains an error in the particulars listed in subsection (4) or (5) and the circumstances contemplated in section 21(1)(a) to (e) of this Act are not applicable, the supplier must—

(i) correct that tax invoice with the correct particulars, within 21 days from the date of the request to correct it: Provided that the time of supply contemplated in section 9 of this Act remains unaltered; and

(ii) obtain and retain information sufficient to identify the transaction to which that tax invoice and the corrected tax invoice

[Subsection (1B) inserted by section 7 of Act 22 of 2018]

(2)     Where a recipient, being a registered vendor, creates a document containing the particulars specified in this section and purporting to be a tax invoice in respect of a taxable supply of goods or services made to the recipient by a supplier, being a registered vendor, that document shall be deemed to be a tax invoice provided by the supplier under subsection (1) of this section where-

(a)     the Commissioner has granted prior approval for the issue of such documents by a recipient or recipients of a specified class in relation to the taxable supplies or taxable supplies of a specified category to which the documents relate; and

(b)     the supplier and the recipient agree that the supplier shall not issue a tax invoice in respect of any taxable supply to which this subsection applies; and

(c)     such document is provided to the supplier and a copy thereof is retained by the recipient:

Provided that where a tax invoice is issued in accordance with this subsection, any tax invoice issued by the supplier in respect of that taxable supply shall be deemed not to be a tax invoice for the purposes of this Act.

(3)     Where a supply of goods is deemed by section 8(10) to be made and both the recipient and the supplier in relation to that supply are registered vendors, the recipient shall, within 21 days after the day on which such supply is deemed by section 9(8) to be made, create and furnish to the supplier a document which contains the particulars specified in this section, and such document shall for the purposes of this Act be deemed to be a tax invoice provided by the supplier under subsection (1) of this section.

(4)     Except as the Commissioner may otherwise allow, and subject to this section, a tax invoice (full tax invoice) shall be in the currency of the Republic and shall contain the following particulars:

(a)     The words “tax invoice”, “VAT invoice” or “invoice”;

[Paragraph (a) substituted by section 26 of Act 23 of 2015 effective on 8 January 2016]

(b)     the name, address and VAT registration number of the supplier;

[Paragraph (b) substituted by section 47 of Act 16 of 2004]

(c)     the name, address and where the recipient is a registered vendor, the VAT registration number of the recipient.

[Paragraph (c) substituted by section 175 of Act 45 of 2003 and section 47 of Act 16 of 2004]

(d)     an individual serialized number and the date upon which the tax invoice is issued;

(e)     full and proper description of the goods (indicating, where applicable, that the goods are second-hand goods) or services supplied;

[Paragraph (e) substituted by section 157 of Act 60 of 2001 and section 104 of Act 32 of 2004]

(f)     the quantity or volume of the goods or services supplied;

(g)     either-

(i)      the value of the supply, the amount of tax charged and the consideration for the supply; or

(ii)     where the amount of tax charged is calculated by applying the tax fraction to the consideration, the consideration for the supply and either the amount of the tax charged, or a statement that it includes a charge in respect of the tax and the rate at which the tax was charged:

[Paragraph (g) substituted by GN 2695 of 1991 and section 25 of Act 136 of 1992]

Provided that the requirement that the consideration or the value of the supply, as the case may be, shall be in the currency of the Republic shall not apply to a supply that is charged with tax under section 11.

[Subsection (4) amended by section 94 of Act 30 of 1998 and section 157 of Act 60 of 2001]

(5)     Notwithstanding anything in subsection (4), where the consideration in money for a supply does not exceed R5 000, a tax invoice (abridged tax invoice) shall be in the currency of the Republic and shall contain the particulars specified in that subsection or the following particulars:

[Words preceding paragraph (a) substituted by section 29 of Act 21 of 2012 effective on 20 December 2012]

(a)     The words “tax invoice”, “VAT invoice” or “invoice”;

[Paragraph (a) substituted by section 26 of Act 23 of 2015 effective on 8 January 2016]

(b)     the name, address and VAT registration number of the supplier;

[Paragraph (b) substituted by section 47 of Act 16 of 2004]

(c)     an individual serialized number and the date upon which the tax invoice is issued;

(d)     a description of the goods (indicating, where applicable, that the goods are second-hand goods) or services supplied;

[Paragraph (d) substituted by section 104 of Act 32 of 2004]

(e)     either-

(i)      the value of the supply, the amount of tax charged and the consideration for the supply; or

(ii)     where the amount of tax charged is calculated by applying the tax fraction to the consideration, the consideration for the supply and either the amount of the tax charged, or a statement that it includes a charge in respect of the tax and the rate at which the tax was charged:

[Paragraph (e) substituted by GN 2695 of 1991 and section 25 of Act 136 of 1992]

Provided that this subsection shall not apply to a supply that is charged with tax under section 11.

[Subsection (5) amended by section 33 of Act 97 of 1993, section 94 of Act 30 of 1998, section 157 of Act 60 of 2001, section 104 of Act 32 of 2004 and section 14 of Act 9 of 2007]

(5A)  Notwithstanding anything to the contrary in subsections (4) and (5), where a vendor acquires an enterprise from another vendor and as a result of that acquisition, the supplying vendor immediately ceases to be a vendor, and the purchasing vendor, within a period of six months from the date of the acquisition, issues or receives a tax invoice in respect of the acquired enterprise, that tax invoice may reflect the name, address and VAT registration number of the supplying vendor.

[Subsection (5A) inserted by section 35 of Act 18 of 2009]

(5B)   Notwithstanding any other provision of this Act, if the supply by a vendor relates to any enterprise contemplated in paragraphs (b)(vi) and (b)(vii) of the definition of “enterprise” in section 1, the vendor shall be required to provide a tax invoice containing such particulars as must be prescribed by the Commissioner by notice in the Gazette.

[Subsection (5B) inserted by section 176(1)(a) of Act 31 of 2013 and substituted by section 99(1) of Act 43 of 2014 and by section 19 of Act 33 of 2019]

(6)     Notwithstanding any other provision of this Act, a supplier shall not be required to provide a tax invoice if the total consideration for a supply is in money and does not exceed R50: Provided that the supplier shall provide the recipient with a document as is acceptable to the Commissioner.

[Subsection (6) amended by section 157 of Act 60 of 2001 and substituted by section 30 of Act 8 of 2010 effective on 2 November 2010]

(7)     Where the Commissioner is satisfied that there are or will be sufficient records available to establish the particulars of any supply or category of supplies, and that it would be impractical to require that a full tax invoice be issued in terms of this section, the Commissioner may, subject to such conditions as the Commissioner may consider necessary, direct-

(a)     that any one or more of the particulars specified in subsection (4) or (5) shall not be contained in a tax invoice; or

(b)     that a tax invoice is not required to be issued; or

(c)     that the particulars specified in subsection (4) or (5) be furnished in any other manner.

[Paragraph (c) added by section 91 of Act 53 of 1999]

(8)     Notwithstanding anything in this section, where a supplier makes a supply (not being a taxable supply) of second-hand goods to a recipient, being a registered vendor, the recipient shall in the form as the Commissioner may prescribe, maintain a declaration by the supplier stating whether the supply is a taxable supply or not and shall further maintain sufficient records to enable the following particulars to be ascertained:

(a)

(i)    The name of the supplier and-

(aa)    where the supplier is a natural person, his identity number; or

(bb)   where the supplier is not a natural person, the name and identity number of the natural person representing the supplier in respect of the supply and any legally allocated registration number of the supplier:

Provided that the recipient-

(A)    shall verify such name and identity number of any such natural person with reference to his identity card, as contemplated in section 1 of the Identification Act, 1997 (Act 68 of 1997), and retain a photocopy of such name and identity number appearing in such identity card; or

[Paragraph (A) substituted by section 20 of Act 24 of 2020]

(B)    shall verify such name and registration number of any supplier other than a natural person with reference to its business letterhead or other similar document and retain a photocopy of such name and registration number appearing on such letterhead or document; and

(ii)   the address of the supplier;

(b)     the date upon which the second-hand goods were acquired;

[Paragraph (b) substituted by section 176(1)(b) of Act 31 of 2013 and by section 31(1)(b) of Act 20 of 2022 effective on 1 January, 2023]

(c)     a description of the goods;

(d)     the quantity or volume of the goods;

(e)     the consideration for the supply; and

(f)      proof and date of payment.

[Subsection (8) amended by section 35 of Act 27 of 1997, by section 94(e) of Act 30 of 1998, by section 91(c) of Act 53 of 1999, by section 104(1)(f) of Act 32 of 2004 and by section 38 of Act 21 of 2006, substituted by section 30(b) of Act 8 of 2010 and amended by section 31(1)(a) of Act 20 of 2022 effective on 1 January, 2023]

(8A)   Notwithstanding anything in this section, where a supplier makes a deemed supply (not being a taxable supply) of goods contemplated in section 8(10) to a recipient, being a registered vendor, the recipient shall maintain sufficient records to enable the following particulars to be ascertained:

(a)     The date upon which the goods were repossessed or surrendered, as the case may be;

(b)     particulars referred to in paragraphs (a), (c), (d) and (e) of subsection (8); and

(c)     further particulars in the form and manner as the Commissioner may prescribe.

[Subsection (8A) added by section 31(1)(c) of Act 20 of 2022 effective on 1 January, 2023]

21. Credit and debit notes

(1)     This section shall apply where, in relation to the supply of goods or services by any registered vendor-

(a)     that supply has been cancelled; or

(b)     the nature of that supply has been fundamentally varied or altered; or

(c)     the previously agreed consideration for that supply has been altered by agreement with the recipient, whether due to the offer of a discount or for any other reason; or

(d)     the goods or services or part of the goods or services supplied have been returned to the supplier, including the return to—

(i)      a vendor of a returnable container, the vendor in such case being deemed for the purposes of this Act to have made the supply of the container in respect of which the deposit was charged, whether the supply was made by him or any other person; or

(ii)     a vendor, where a supply of an enterprise as a going concern, contemplated in section 11(1)(e) of this Act, was made to that vendor, the vendor in such case being deemed for purposes of this Act to have made the supply of the goods or services to the recipient, whether the supply was made by him or the other vendor that made the supply of that enterprise as a going concern; or

[Paragraph (d) substituted by section 26(1)(a) of Act 136 of 1992, amended by section 150(1)(a) of Act 22 of 2012 and substituted by section 8 of Act 22 of 2018]

(e)     an error has occurred in stipulating the amount of consideration agreed upon for that supply; or

[Paragraph (e) added by section 150(1)(b) of Act 22 of 2012 and substituted by section 51(1)(a) of Act 17 of 2023 effective on 1 April, 2024]

(f)      prepaid vouchers contemplated in section 10(19) have been issued by any registered vendor that is an “electronic communications service licensee” as defined in section 1 of the Electronic Communications Act, 2005 (Act 36 of 2005), and the nature of the supply specified on such voucher has been fundamentally varied or altered,

[Paragraph (f) added by section 51(1)(b) of Act 17 of 2023 effective on 1 April, 2024]

and the supplier has-

(i)      provided a tax invoice in relation to that supply and the amount shown therein as tax charged on that supply is incorrect in relation to the amount properly chargeable on that supply as a result of the occurrence of any one or more of the above-mentioned events; or

(ii)     furnished a return in relation to the tax period in respect of which output tax on that supply is attributable, and has accounted for an incorrect amount of output tax on that supply in relation to the amount properly chargeable on that supply as a result of the occurrence of any one or more of the above-mentioned events.

(2)     Where a supplier has accounted for an incorrect amount of output tax as contemplated in subsection (1), that supplier shall make an adjustment in calculating the tax payable by the supplier in the return for the tax period during which it has become apparent that the output tax is incorrect, and if-

(a)     the output tax properly chargeable in relation to that supply exceeds the output tax actually accounted for by the supplier, the amount of that excess shall be deemed to be tax charged by that supplier in relation to a taxable supply attributable to the tax period in which the adjustment is to be made, and shall not be attributable to any prior tax period; or

(b)     the output tax actually accounted for exceeds the output tax properly chargeable in relation to that supply, that supplier shall either make a deduction in terms of section 16(3) in respect of the amount of that excess (such amount being deemed for the purposes of that section to be input tax), or reduce the amount of output tax attributable to the said tax period in terms of section 16 (4) by the amount of that excess: Provided that the said deduction shall not be made where the excess tax has been borne by a recipient of goods or services supplied by the supplier and the recipient is not a vendor, unless the amount of the excess tax has been repaid by the supplier to the recipient, whether in cash or by way of a credit against any amount owing to the supplier by the recipient.

[Paragraph (b) amended by section 34 of Act 97 of 1993]

(3)     Subject to this section, where a tax invoice has been provided as contemplated in subsection (1) (i), and-

(a)     the amount shown as tax charged in that tax invoice exceeds the actual tax charged in respect of the supply concerned, the supplier shall provide the recipient with a credit note, containing the following particulars:

(i)      the words “credit note”;

[Subparagraph (i) substituted by section 27 of Act 23 of 2015 effective on 8 January 2016]

(ii)      the name, address and VAT registration number of the vendor;

[Subparagraph (ii) substituted by section 48 of Act 16 of 2004]

(iii)    the name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient, except where the credit note relates to a supply in respect of which a tax invoice contemplated in section 20(5) was issued;

[Subparagraph (iii) substituted by section 26 of Act 136 of 1992, section 176 of Act 45 of 2003 and section 48 of Act 16 of 2004]

(iv)  the date on which the credit note was issued;

(v)   either-

(aa)   the amount by which the value of the said supply shown on the tax invoice has been reduced and the amount of the excess tax; or

(bb)   where the tax charged in respect of the supply is calculated by applying the tax fraction to the consideration, the amount by which the consideration has been reduced and either the amount of the excess tax or a statement that the reduction includes an amount of tax and the rate of the tax included;

[Subparagraph (v) substituted by section 26 of Act 136 of 1992]

(vi)    a brief explanation of the circumstances giving rise to the issuing of the credit note;

(vii)   information sufficient to identify the transaction to which the credit note refers;

(b)     the actual tax charged in respect of the supply concerned exceeds the tax shown in the tax invoice as charged, the supplier shall provide the recipient with a debit note, containing the following particulars:

(i)     the words “debit note”;

[Subparagraph (i) substituted by section 27 of Act 23 of 2015 effective on 8 January 2016]

(ii)     the name, address and VAT registration number of the vendor;

[Subparagraph (ii) substituted by section 48 of Act 16 of 2004]

(iii)    the name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient, except where the debit note relates to a supply of goods in respect of which a tax invoice contemplated in section 20(5) was issued.

[Subparagraph (iii) substituted by section 26 of Act 136 of 1992, section 176 of Act 45 of 2003 and section 48 of Act 16 of 2004]