Page 428 - Juta's Indirect Tax

IN 52 (3) VaLue-added tax act: InterPretatIOn nOtes IN 52 (3) INTERPRETATION NOTE: NO. 52 (Issue 3)
DATE: ACT: SECTIONS:
SUBJECT:
Preamble
10 March 2014
VALUE-ADDED TAX ACT 89 OF 1991
PROVISO (ii) AND (iii) TO SECTION 27(6)
APPROVAL TO END A TAX PERIOD ON A DAY OTHER THAN THE LAST DAY OF A MONTH
In this Note unless the context indicates otherwise –
• ‘BGR’ means a binding general ruling issued under section 89 of the TA Act; • ‘section’ means a section of the VAT Act;
• ‘TA Act’ means the Tax Administration Act 28 of 2011,
• ‘VAT Act’ means the Value-Added Tax Act No. 89 of 1991; and
• any word or expression bears the meaning ascribed to it in the VAT Act.
1. Purpose
This Note serves to –
• set out those instances when tax periods may end on a day other than the last day of a month (referred to in this Note
as cut-off dates);
• discuss under 5, paragraph 2 of BGR (VAT) No. 19, which provides the necessary approval to change cut-off dates; and
• withdraw and replace under section 86(1) of the TA Act, Interpretation Note No. 52 (Issue 2) dated 30 April 2013,
including the BGR contained therein, with effect from the date of issue of this Note.
2. Background
A supplier, being a vendor, making a taxable supply of goods or services in the course or furtherance of its enterprise is required to levy VAT at the applicable rate on the value of the supply. Furthermore, a supply is deemed to have been made under the time of supply provisions contained in section 9. Subsections (2) to (11) of section 9 regulate the time of supply of speci c supplies. In all other instances the general rule, in section 9(1), is that the time of supply occurs at the earlier of the date of receipt of the consideration or an invoice is issued in relation to a supply.
A vendor is required to determine and declare its VAT liability by deducting the input tax incurred on taxable goods and services acquired or imported from output tax charged on taxable supplies made in a speci c period. This period is referred to as a tax period.
3. The law
The relevant sections of the VAT Act are quoted in the Annexure.
4. Application of the law
A vendor is required to submit VAT 201 returns and account for VAT to SARS according to the tax periods allocated to the vendor by the Commissioner. Section 27(1) sets out the various categories of tax periods available to vendors (see the Annexure). Tax periods range from one, two, four, six or 12 calendar months.
The tax periods in section 27(1) all end on the last day of the last month of the relevant tax period. However, proviso (ii) to section 27(6) makes provision for the Commissioner to allow a tax period to end on a xed day instead of the last day of the month. Whilst this provision allows for exibility regarding the date on which a tax period may end, the Commissioner will only approve a xed day if that xed day falls within 10 days before or after the last day of the tax period as contemplated in section 27(1) (the 10-day rule).
A vendor may change the date on which a tax period ends, but the liability to submit the VAT 201 return and pay the tax (where applicable) is prescribed under section 28 of the VAT Act read with section 25 of the TA Act. In this regard, the normal rules for manual or e- ling submission of returns apply. For ease of reference, the day that a vendor may choose to end its tax period other than on the last day of the month, is set out below:
Last day of tax period
10 days before
10 days after
31 January
21 – 30 January
1 – 10 February
28/29 February
18 – 27 February/ 19 - 28 February
1 – 10 March
31 March
21 – 30 March
1 – 10 April
30 April
20 – 29 April
1 – 10 May
31 May
21 – 30 May
1 – 10 June
30 June
20 – 29 June
1 – 10 July
31 July
21 – 30 July
1 – 10 August
31 August
21 – 30 August
1 – 10 September
30 September
20 – 29 September
1 – 10 October
420 Juta’s IndIrect tax 2016