Page 426 - Juta's Indirect Tax

IN 49 (2) VaLue-added tax act: InterPretatIOn nOtes IN 49 (2)
(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:
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 quali es or will qualify for a deduction in terms of paragraph (d); (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;
(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;
(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);
(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 bene t 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 or other deduction 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
document or records in relation to that supply;
(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)
(bb) (cc)
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
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
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:
Provided that—
(i) where such goods consist of second-hand goods contemplated in the proviso to paragraph (b) of the de nition
of ‘input tax’ in section 1, the amount determined in terms of this subsection shall not exceed the amount of transfer duty or stamp duty, as the case may be, which was or would have been payable, less any amount which has previously been deducted in terms of the provisions of subsection (3)(a)(ii) or (b)(i) of this section or section 18(4) or (5), in respect of such acquisition, original issue or registration of transfer, as the case may be;
418 Juta’s IndIrect tax 2016