Page 329 - Juta's Indirect Tax

IN 31 (3) VaLue-added tax act: InterPretatIOn nOtes IN 31 (3)
U
Services deemed to be supplied by a designated entity to a public authority or municipality in respect of a payment received in terms of the Skills Development Act 97 of 1998 (the Skills Development Act) [s 11 (2) (u)]
A copy of any applicable documentation/correspondence in respect of the payment made in terms of the Skills Development Act.
V
Services relating to goods supplied under warranty by a warrantor who is not a resident of the Republic and is not a vendor [s 11 (2) (v)]
(a) The vendor’s copy of the zero-rated tax invoice;
(b) A copy of the warranty agreement or any other documentation setting out the terms of the warranty and the
warrantor’s particulars;
(c) Written con rmation from the warrantor that the warrantor
is not a resident of the Republic and not a vendor, where not stated in the copy of the warranty agreement or any other relevant documentation; and
d) Proof of payment.
W
Municipal rates levied by a municipality [s 11 (2) (w)]
The vendor’s copy of the tax invoice re ecting the municipal rates levied at the zero rate.
X
Services supplied by the owner of a horse, being a vendor, 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 [s 11 (2) (x)]
(a) The vendor’s copy of the zero-rated tax invoice;
(b) A copy of the remittance advice/statement issued by the
operator of the horse-racing event; and (c) Proof of payment.
6. Conclusion
The documentation referred to above is, for the purposes of section 11 (3), the documentation that is acceptable to the Commissioner and which must be obtained and retained by the vendor in order to apply the zero rate in terms of the provisions of section 11 (1) or 11 (2) in respect of a supply of goods or services. A vendor making a zero-rated supply must be in possession of the applicable documentary proof within a period of 90 days calculated from the earlier of the time an invoice is issued or the time any payment of consideration is received by the vendor in respect of the supply, except where a supply of goods is made in terms of section 11 (1) (a) (i), read with paragraph (a) of the de nition of ‘exported’ in section 1 (1)* and section 11 (1) (a) (ii) (aa), read with paragraph (d) of the de nition of ‘exported’ in section 1 (1).† In this instance the required documentary proof to be obtained and retained by a vendor and the time period within which the documentary proof must be obtained by the vendor are set out in Interpretation Note No. 30 (Issue 2) ‘Documentary Proof Required on Consignment or Delivery of Movable Goods to a Recipient at an Address in an Export Country’ (15 March 2006) and the Scheme‡ respectively.
In the event that the vendor is not in possession of the applicable documentary proof within the mentioned 90 day period, subject to the aforementioned exceptions, the vendor must account for output tax by applying the tax fraction to the consideration for the supply [that is, the consideration is deemed to include VAT in terms of section 64 (1)]. This does not apply in respect of supplies that would have been exempt from VAT in terms of section 12 had it not been zero-rated in terms of section 11 (for example, the supply of nancial services to a person who is not a resident of the Republic). These supplies will therefore revert to being exempt with the corresponding denial of input tax.
Should the vendor receive the documentation in respect of which output tax was calculated within ve years from the end of the tax period during which the original tax invoice should have been issued, the output tax adjustment previously declared may be deducted as an adjustment in eld 18 of the vendor’s VAT return for the tax period in which the documentation is received.
The rate of tax applicable to the adjustment is the rate of tax in force at the date of issue of the tax invoice.
A vendor who does not have all the documentary proof required, may, before the expiry of the 90 day period mentioned above submit a written application to the Commissioner which may be submitted either by e-mail to VATRulings@ sars.gov.za or by fax to 086 540 9390 and obtain a VAT ruling or a VAT class ruling, in terms of section 41B read with Chapter 7 of the Tax Administration Act 28 of 2011, requesting the Commissioner to consider the circumstances of that vendor and to determine whether the alternative documentary proof obtained by the vendor would be acceptable.
Chapter 4 of the Tax Administration Act 28 of 2011, places on the vendor, the burden of proof to retain documentation to substantiate the vendor’s entitlement to apply the zero rate to the supply of goods or services.
Legal and Policy Division
SOUTH AFRICAN REVENUE SERVICE Date of rst issue: 31 March 2005
Date of second issue: 30 March 2012
* Refer to Interpretation Note No. 30 (Issue 2) dated 15 March 2006.
† Refer to the Scheme.
‡ This includes any future updates or Regulations as envisaged in paragraphs (a) and (d) of the de nition of ‘ex-
ported’.
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