Page 492 - Juta's Indirect Tax

IN 82 VaLue-added tax act: InterPretatIOn nOtes IN 83 (2)
(b) If the method of determination of consideration in money contemplated in subparagraph (a) is used with reference to a motor vehicle, that method of determination of consideration in money shall also be used for the succeeding 11 months in respect of the motor vehicle in question.
(3) For the purposes of the proviso to subsection (13) of section 10 of the Act, the consideration in money for the deemed supply shall be -
(a) 0,3 per cent of the determined value of the motor vehicle (for each month or part thereof calculated as from 1
October 1991) where the motor vehicle is a motor car as contemplated in the Act
and the vendor was in terms of section 17(2) of the Act not entitled, or would not have been entitled had that section been applicable prior to the commencement date, to deduct the full amount of input tax in terms of section 16(3) of the Act in respect of such motor car when it was supplied to or imported by him; or
(b) in a case other than contemplated in paragraph (a) 0,6 per cent of the determined value of the motor vehicle (for each month or part thereof calculated as from 1 October 1991): Provided that where the employee pays a consideration for the right of use of such motor vehicle, the consideration in money determined monthly in terms of this paragraph shall be reduced by the lesser of the consideration paid by the said employee or the amount of the consideration in money determined monthly:
Provided that where the employee bears the full cost of repairs and maintenance of the motor vehicle and no compensation in the form of an allowance or reimbursement is payable by the vendor to the employee in respect of the said cost, the consideration in money so determined monthly shall be reduced by the lesser of –
(i) R85; or
(ii) the amount of the consideration in money determined monthly:
Provided further that the consideration in money calculated in this paragraph, after the application of the provisos, shall be reduced to the extent that the right to use the motor vehicle is granted by the vendor in the course of making exempt supplies.
Interpretation Note: No. 83 (Issue 2)
DATE: ACT: SECTIONS: SUBJECT:
Preamble
9 April 2015
VALUE-ADDED TAX ACT 89 OF 1991 SECTIONS 20 (4), (5), (7), 21 (1) AND (5) APPLICATION OF SECTIONS 20 (7) AND 21 (5)
In this Note unless the context indicates otherwise –
• ‘BGR’ means a binding general ruling issued under section 89 of the Tax Administration Act, 2011; • ‘section’ means a section of the VAT Act;
• ‘VAT’ means value-added tax;
• ‘VAT Act’ means the Value-Added Tax Act No. 89 of 1991; and
• any other word or expression bears the meaning ascribed to it in the VAT Act.
1. Purpose
This Note –
• sets out the requirements that must be met in order for the Commissioner to apply the provisions of sections 20(7) and
21(5);
• withdraws VAT Practice Note: No 2 dated 25 September 1991; and
• replicates under 5, paragraphs 2 and 3 of Binding General Ruling (VAT) No. 27 ‘Application of sections 20(7) and
21(5)’.
2. The law
The relevant sections of the VAT Act are quoted in the Annexure.
3. Application of the law
Tax invoices
A vendor making a taxable supply of goods or services must, under section 20(1), issue a tax invoice to the recipient within 21 days of the date of that supply. However, section 20(2) allows a recipient of a supply, after obtaining approval from the Commissioner, to issue a tax invoice for supplies made to it. The document issued by the recipient in this instance shall, subject to certain conditions, be deemed to be a tax invoice provided by the supplier under section 20(1).
A document must contain certain information prescribed in section 20 to qualify as a ‘tax invoice’. Section 20(7) allows the Commissioner, subject to such conditions considered necessary, to direct in instances where there would be suf cient records available to establish the particulars of a supply and the Commissioner is satis ed that it is impractical to issue a full tax invoice, that –
484 Juta’s IndIrect tax 2016