Page 429 - Juta's Indirect Tax

IN 52 (3) VaLue-added tax act: InterPretatIOn nOtes IN 52 (3)
31 October
21 – 30 October
1 – 10 November
30 November
20 – 29 November
1 – 10 December
31 December
21 – 30 December
1 – 10 January
5. Binding general ruling (VAT) No. 19
The approved categories and conditions referred to in paragraph 2 of BGR (VAT) No. 19, which is effective since 1 May 2013, are discussed below.
5.1 Approved categories
The following categories of cut-off dates of a vendor’s tax periods, listed below, are approved by the Commissioner for purposes of proviso (ii) to section 27(6):
• A xed day, being a speci c day of the week.
• A xed date, being a speci c date in a calendar month.
• A xed day determined in accordance and consistent with the ‘commercial accounting periods’ applied by the vendor.
5.2 Conditions for the Commissioner’s approval
The approval set out in 5.1 is conditional upon the following:
• In respect of the cut-off dates set out in the last-mentioned category, the vendor is required to retain the necessary proof
that the cut-off dates required are in accordance and consistent with its commercial accounting periods (for example, the minutes of a board meeting in which a decision was made regarding the entity’s commercial accounting period or proof of cut-off dates for management reporting purposes).
• In all instances where a change in cut-off dates is allowed, the rst day of the next tax period is the day following the last day of the previous tax period, or the day following the xed day as approved by the Commissioner.
• Any cut-off date that is changed in accordance with this ruling must be for a future tax period and remain unchanged for a minimum period of 12 months under proviso (ii) to section 27(6).
• Notwithstanding any of the above, the cut-off date must fall within 10 days before or after the end of the tax period.
• Failure to comply with the above will result in the imposition of interest under section 39 of the VAT Act and penalties under sections 210 and 213 of the TA Act, where applicable.
6. General
A vendor who intends changing the date on which its tax period ends, and the date does not fall within one of the approved categories, may apply for a VAT ruling or VAT class ruling in writing by sending an e-mail to VATRulings@ sars.gov.za or by facsimile to 086 540 9390. In this regard a clearly motivated application complying with the provisions of section 79 of the TA Act, excluding sections 79(4)(f) and (k) and (6), must be submitted. The cut-off dates requested must fall within the ambit of the 10-day rule.
7. Examples
The following are examples of categories of cut-off dates that the Commissioner has approved:
Example 1 – Vendor’s month-end reporting ends on a xed date
Scenario:
Vendor A is a VAT-registered vendor and is required to submit VAT 201 returns on a monthly basis as contemplated in section 27(1). However, Vendor A ends its month-end reporting on the 7th day of each month for purposes of its management reports.
Question:
Can Vendor A, instead of ending its tax periods on the last day of each month, end its future tax periods on the 7th day of each month?
Result:
Yes, Vendor A’s cut-off dates fall within the categories for which approval is granted by the Commissioner as set out in 5.1. Furthermore, Vendor A must ensure that it satis es the conditions set out in 5.2.
Tax Period
Commercial Accounting Date
March 2012
28 March 2012
April 2012
25 April 2012
May 2012
30 May 2012
Example 2 – Vendor’s month-end reporting ends in terms of its ‘commercial accounting periods’
Scenario:
Vendor C is a VAT-registered vendor and is required to submit VAT 201 returns on a monthly basis as contemplated in section 27(1). Vendor C ends its month-end for reporting purposes on the following days (commercial accounting periods) which were approved by its board of directors and documented and retained as minutes in the company’s records:
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