Page 36 - Juta's Indirect Tax

s 10 VALUE-ADDED TAX ACT 89 OF 1991 s 10
section 16 (3) to make a deduction of the full amount
of tax in respect of that supply,
[Para. (c) substituted by s. 26 (a) 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 bene t 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).
[Sub-s. (4A) inserted by s. 16 (1) (a) 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 de ned 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
[Sub-para. (iii) substituted by s. 168 (a) 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
(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.
[Sub-s. (8) amended by s. 26 (b) 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 3 (B 2 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 s. 26 (e) of Act 97 of 1993 and by s. 168 (b) 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
(b)
consideration in money for that supply; or
[Sub-para. (iv) added by s. 26 (d) of Act 97 of 1993.] the open market value of such supply.
(5A) ...
[Sub-s. (5A) inserted by s. 107 (1) of Act 60 of 2008, substituted by s. 122 (1) of Act 7 of 2010 and deleted by s.133 (1) (a) of Act 24 of 2011 – date of commencement of deletion: 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.
[Sub-s. (7) substituted by s. 133 (1) (b) of Act 24 of 2011 – date of commencement: 10 January 2012.]
*Manner prescribed — GN 2835 in GG 13651 of 22 November 1991
28 Juta’s IndIrect tax 2016