Page 335 - Juta's Indirect Tax

IN 39 (2) VaLue-added tax act: InterPretatIOn nOtes IN 39 (2)
2.2 General principles
2.3 National and Provincial Departments and Public Entities (Schedules 1, 2 and 3 of the PSA and Schedules 3A and
3C of the PFMA)
2.4 Taxable or partially taxable national and provincial departments and public entities (Schedules 1, 2 and 3 of the
PSA and Schedules 3A and 3C of the PFMA)
2.5 Constitutional institutions (Schedule 1 to the PFMA)
2.6 Major public entities (Schedule 2 to the PFMA)
2.7 National and provincial government business enterprises (Schedules 3B and 3D of the PFMA)
2.8 Public private partnerships (PPPs) (Regulation 16 of the Treasury Regulations – section 76 of the PFMA)
2.9 Welfare organisations
2.10 Municipalities
2.11 Other private sector vendors (not being designated entities
2.12 Special cases (unlisted entities
3. The law before 1 April 20054. Application of the law before 1 April 2005 4.1 De nition of ‘enterprise’ [Paragraph (b)(i) and (c)]
4.1.1 Paragraph (b)(i) – public authorities
4.1.2 Paragraph (c) – local authorities
4.2 De nition of ‘local authority’
4.3 De nition of ‘public authority’
4.4 De nition of ‘services’
4.5 De nition of ‘transfer payment’
4.6 Section 8 (5) – Certain supplies of goods or services deemed to be made or not made upon receipt of payments
from public and local authorities
4.7 Section 11 (2) – Zero-rating – Services
4.8 Section 11 (2) (p) – Zero-rated ‘transfer payment’
5. The law on or after 1 April 2005
6. Application of the law on or after 1 April 2005
6.1 De nition of ‘enterprise’ [Paragraph (b)(i)]
6.2 De nition of ‘enterprise’ [Proviso (viii)]
6.3 De nition of ‘designated entity’
6.4 De nition of ‘grant’
6.5 De nition of ‘public authority’
6.6 De nition of ‘transfer payment’
6.7 Section 8 (2) proviso (iv) – Certain supplies of goods or services deemed to be made or not made upon ceasing to
be a vendor
6.8 Section 8 (5) – Certain supplies of goods or services deemed to be made or not made upon receipt of a payment
from a public authority or municipality by a designated entity
6.9 Section 8 (5A) – Certain supplies of goods or services deemed to be made or not made upon receipt of a payment
from a public authority or municipality by a vendor (not being a ‘designated entity’)
6.10 Section 8 (23) – Certain supplies of goods or services deemed to be made or not made upon receipt of a housing
subsidy payment by a vendor from a public authority or municipality
6.11 Section 11 (2) – Zero-rating – Services
6.11.1 Section 11 (2) (p) – Zero-rated ‘transfer payment’
6.11.2 Section 11 (2) (t) – Zero-rated ‘grant’
6.11.3 Section 11 (2) (s) – Zero-rated housing subsidy payment
6.11.4 Section 11 (2) (n) – Zero-rated payments to welfare organisations
6.11.5 Section 11 (2) (u) – Zero-rated SETA training grants paid to designated entities
6.12 Section 18 (4) – Change in use adjustments (denial of input tax)
6.13 Section 23 (4) proviso – Registration of persons making supplies in the course of enterprises where the public
entity should have registered before 1 April 2005
6.14 Section 40A – Liability of public authorities and certain public entities for tax and limitation of refunds
7. Practical implications
7.1 New registrations
7.2 Budgeting
7.3 Procurement of goods and services vs ‘unrequited’ grant payments
7.4 Procurement and accounting accruals
7.5 Outstanding VAT returns, payments, assessments and queries
7.6 ‘Ring-fencing’ of trading activities
7.7 Classi cation of new entities and re-classi cation of existing entities in terms of the PFMA
7.8 SETA grants & SDL payments
7.9 Duties, levies and similar charges by regulatory, statutory or administrative authorities
7.10 Foreign donor funded projects
8. Summary
8.1 Before 1 April 2005
8.2 On or after 1 April 2005
Annexure A – Wording of certain provisions in the VAT Act
Annexure B – Public Service Act, 1994 (PSA) – National and provincial departments and their components Annexure C – Public Finance Management Act, 1999 (PFMA) – Listed public entities
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