Page 476 - Juta's Indirect Tax

IN 81 (2) VaLue-added tax act: InterPretatIOn nOtes IN 81 (2)
• ‘taxidermy services’ means the process whereby game trophies receive a complete taxidermy treatment. A complete taxidermy treatment, as set out in the VPN, includes either the –
– mounting of an animal trophy in a life-like manner (for example, full mount, half mount or shoulder mount);
– tanning and processing of skins for display purposes; or
– processing and mounting of skulls, horns, hooves, claws or teeth in some manner for display.
• ‘trophy’ means any part of a wild animal or exotic animal that is hunted and retained by a foreign hunter as a token
or memento of the hunt;
• ‘VAT’ means value-added tax;
• ‘VAT Act’ means the Value-Added Tax 89 of 1991; and
• any other word or expression bears the meaning ascribed to it in the VAT Act.
1. Purpose
This Note explains the VAT treatment of various supplies made to foreign hunters which includes – • hunting services;
• taxidermy services;
• the supply of a trophy; and
• the subsequent export of the trophy.
This Note withdraws VAT Practice Note: No 13 dated 6 September 1994.
2. Description of the various supplies
The various goods and services generally supplied to foreign hunters are described in more detail in 2.1 to 2.6.
2.1 Accommodation
A foreign hunter will usually be provided with accommodation by the hunting out tter as part of the overall hunting safari package.
2.2 Hunting services
Hunting services may include game viewing, tracking game, assistance with the hunt and other related services but exclude raw preparation and taxidermy services which are discussed in 4.4 and 4.5.
2.3 Trophy fee and raw trophy
Once the foreign hunter has hunted the animal, the foreign hunter becomes the owner of the raw trophy and is required to pay a trophy fee, irrespective of whether the animal (or any part of the animal) is retained by the hunter. Hunting out tters may also require hunters to pay trophy fees for wounded animals.
2.4 Dip and pack services
These services are performed as the initial treatment of the raw trophy and include all work which may be required to ensure that the trophy does not decay.
2.5 Taxidermy services
Taxidermists supply both goods (for example, the mounting forms) and services to the foreign hunter at an all-inclusive price.
2.6 Other services consumed in the Republic
These services may form part of the hunting safari package or may be supplied separately by other vendors and include services such as transportation, car rental, medical assistance and so forth.
3. The law
The relevant sections of the VAT Act are quoted in the Annexure.
4. Application of the law
The general rule is that the supply of goods or services in the Republic by a vendor (in the course or furtherance of its enterprise) to a foreign hunter is subject to VAT at the standard rate on the basis that the goods or services are consumed in the Republic. There are certain exceptions to this rule as is evident from the discussion below.
4.1 Accommodation
The supply of ‘commercial accommodation’,* that is, lodging or board and lodging together with domestic goods and services,† by a vendor to a foreign hunter is subject to VAT at the standard rate if the accommodation is supplied in the Republic.
The consideration for the supply of commercial accommodation to a foreign hunter for an unbroken period of more than 28 days at an all-inclusive fee is deemed to be only 60% of the all-inclusive charge. The full value of meals, beverages
* Commercial accommodation’ is de ned in section 1(1).
† Domestic goods and services’ is de ned in section 1(1) to include cleaning, electricity, meals and so forth.
468 Juta’s IndIrect tax 2016