Page 494 - Juta's Indirect Tax

IN 83 VaLue-added tax act: InterPretatIOn nOtes IN 83
vendor in accordance with a written contract for a supply of goods or services which provides for a regular payment of a determinable amount. This will apply in the following circumstances:
• Rental agreements for movable or immovable property
• Royalty agreements
• Short-term insurance
The Commissioner’s direction in respect of the aforementioned transactions, is on condition that –
(a) the recipient is in possession of the contract document which contains the following information:
(i) The names, addresses and VAT registration numbers of the supplier and recipient. The VAT registration number of the recipient will only be required if the recipient is a vendor. Furthermore, the name and VAT registration number of the recipient will not be required if the consideration for the supply does not exceed R5 000;
(ii) A description of the goods or services supplied; and
(iii) A statement that the supplies are charged with VAT at the applicable rate.
(b) the supplier and the recipient retain proof of payment of each amount paid where the relevant contract does not contain the consideration payable;
(c) the contract mentioned above contains a statement that the contract complies with the Commissioner’s direction under section 20(7) or 21(5), as the case may be; and
(d) the abovementioned contract which includes the relevant particulars must be retained for a period contemplated in compliance with section 55 read with Part A of Chapter 4 of the Tax Administration Act No. 28 of 2011.
This ruling constitutes a BGR issued under section 89 of the Tax Administration Act.
Period for which this ruling is valid
This BGR is effective from date of issue and will apply until it is withdrawn or the relevant legislation is amended. All rulings or decisions issued regarding the application of section 20(7) or 21(5) remain in force until such rulings expire or are speci cally withdrawn.
6. Conclusion
This Note sets out the requirements that have to be met in order for the Commissioner to apply the provisions of section 20(7) or 21(5). A vendor that satis es the requirements does not have to apply for prior approval from the Commissioner to not issue a tax invoice, credit or debit note.
Legal and Policy Division
SOUTH AFRICAN REVENUE SERVICE
Annexure – The law Section 1(1) – De nitions
‘tax invoice’ means a document provided as required by section 20;
Section 20 – Tax invoices
(1) Except as otherwise provided in this section, a supplier, being a registered vendor, making a taxable supply (other than a supply contemplated in section 8(10)) to a recipient, must within 21 days of the date of that supply issue a tax invoice containing such particulars as are speci ed in this section: Provided that—
(i) it shall not be lawful to issue more than one tax invoice for each taxable supply;
(ii) if a vendor claims to have lost the original tax invoice, the supplier or the recipient, as the case may be, may
provide a copy clearly marked ‘copy’.
(2) Where a recipient, being a registered vendor, creates a document containing the particulars speci ed in this
section and purporting to be a tax invoice in respect of a taxable supply of goods or services made to the recipient by a supplier, being a registered vendor, that document shall be deemed to be a tax invoice provided by the supplier under subsection (1) of this section where—
(a) the Commissioner has granted prior approval for the issue of such documents by a recipient or recipients of a
speci ed class in relation to the taxable supplies or taxable supplies of a speci ed category to which the documents
relate; and
(b) the supplier and the recipient agree that the supplier shall not issue a tax invoice in respect of any taxable supply
to which this subsection applies; and
(c) such document is provided to the supplier and a copy thereof is retained by the recipient:
Provided that where a tax invoice is issued in accordance with this subsection, any tax invoice issued by the supplier in respect of that taxable supply shall be deemed not to be a tax invoice for the purposes of this Act
.. .
(4) Except as the Commissioner may otherwise allow, and subject to this section, a tax invoice (full tax invoice) shall be in the currency of the Republic and shall contain the following particulars:
(a) The words ‘tax invoice’ in a prominent place;
(b) the name, address and VAT registration number of the supplier;
(c) the name, address and where the recipient is a registered vendor, the VAT registration number of the recipient; (d) an individual serialized number and the date upon which the tax invoice is issued;
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