Page 394 - Juta's Indirect Tax

IN 41 (3) VaLue-added tax act: InterPretatIOn nOtes IN 41 (3) INTERPRETATION NOTE: NO. 41 (ISSUE 3)
DATE: 31 March 2014
ACT: VALUE-ADDED TAX ACT 89 OF 1991
SECTIONS: SECTIONS1(1),8(13),8(13A),9(3)(e),16(3)(a),16(3)(d),16(3)(e),17(2)(a),17(2)(c)AND72 SUBJECT: APPLICATION OF THE VAT ACT TO THE GAMBLING INDUSTRY
CONTENTS
Preamble
1. Purpose
2. The law
3. Application of the law
3.1 De nitions and concepts
3.1.1 Registration as a vendor 3.1.2 Output tax
3.1.3 Deemed supplies
3.1.4 Input tax and deductions 3.1.5 Entertainment
3.2 Horseracing industry
3.2.1 Racing operators
3.2.2 Racehorse owners
3.2.3 The manager and/or trainer
3.2.4 Bookmakers
3.2.5 Betting transactions
3.2.6 Payment of betting taxes
3.2.7 Bookmaker-to-bookmaker transactions
3.3 Casinos
3.3.1 Calculation of VAT 3.3.2 Deductions by casinos 3.3.3 Entertainment
(a) General
(b) Prizes
(c) In-house entertainment (d) Outsourced entertainment
3.3.4 Motor cars
3.3.5 Wide Area Progressive Jackpots (WAPJ)
4. Conclusion
Annexure A – The law
Preamble
In this Note unless the context indicates otherwise –
• ’bookmaker’ means a person who accepts and pays out bets on the outcome of sports contests, including horse races
or any other events;
• ‘punter’ means a person who places a bet;
• ‘section’ means a section of the VAT Act;
• ‘VAT Act’ means the Value-Added Tax Act 89 of 1991; and
• any word or expression bears the meaning ascribed to it in the VAT Act.
1. Purpose
This Note provides clarity on the value-added tax (VAT) implications of speci c transactions undertaken in the gambling industry.
2. The law
The relevant sections of the VAT Act are quoted in Annexure A. 3. Application of the law
3.1 De nitions and concepts
3.1.1 Registration as a vendor
A person conducting an enterprise where the value of the taxable supplies made by that person exceeds R1 million in a consecutive 12-month period or will exceed that amount under a contractual obligation in writing, will be required to register for VAT.* Alternatively, a person who has made taxable supplies that have exceeded R50 000 but not R1 million
* From 1 April 2014, the requirement of a reasonable expectation to exceed R1 million taxable supplies is replaced with the requirement that the threshold will be exceeded under a contractual obligation in writing.
386 Juta’s IndIrect tax 2016