Page 54 - Juta's Indirect Tax

s 16
VALUE-ADDED TAX ACT 89 OF 1991 s 17
date as the Commissioner may consider equitable and such other date must fall—
(aa) in the case of a vendor who is a taxpayer as
de ned in section 1 of the Income Tax Act, within the year of assessment as de ned in that Act; or
(bb) in the case of a vendor who is not a taxpayer as de ned in section 1 of the Income Tax Act, within the period of twelve months ending on the last day of February, or if such vendor draws up annual nancial statements in respect of a year ending other than on the last day of February, within that year,
during which the application for the aforementioned method was made by the vendor.
[Para. (iii) added by s. 92 (c) of Act 30 of 1998 and
substituted by s. 84 (1) (b) of Act 8 of 2007 and by s. 271 of Act 28 of 2011 – date of commencement: 1 October 2012.]
[Sub-s. (1) amended by s. 22 (a) of Act 136 of 1992, by s. 92 (a) of Act 30 of 1998, by s. 84 (1) (a) of Act 8 of 2007 and by s. 271 of Act 28 of 2011 – date of commencement: 1 October 2012.]
(2) Notwithstanding anything in this Act to the contrary, a vendor shall not be entitled to deduct from the sum of the amounts of output tax and refunds contemplated in section 16 (3), any amount of input tax—
(a) in respect of goods or services acquired by such
vendor to the extent that such goods or services are acquired for the purposes of entertainment: Provided that this paragraph shall not apply where—
(i) such goods or services are acquired by the vendor for making taxable supplies of entertainment in the ordinary course of an enterprise which— (aa)continuously or regularly supplies enter-
tainment to clients or customers (other than in the circumstances contemplated in item (bb)) for a consideration to the extent that such taxable supplies of entertainment are made for a charge which—
(A) covers all direct and indirect costs of such entertainment; or
(B) is equal to the open market value of such supply of entertainment,
unless—
(i) such costs or open market value is
for bona de promotion purposes not charged by the vendor in respect of the supply to recipients who are clients or customers in the ordinary course of the enterprise, of entertainment which is in all respects similar to the entertainment continuously or regularly supplied to clients or customers for consideration; or
(ii) the goods or services were acquired by the vendor for purposes of making taxable supplies to such clients or customers of entertainment which consists of the provision of any food and a supply of any portion of such food is subsequently made to any employee of the vendor or to any welfare organization as all such food was not consumed in the course of making such taxable supplies;
[Item (aa) amended by s. 84 (a) of Act 20 of 2006.] (bb) supplies entertainment to any employee or of ce holder of the vendor or any connected person in relation to the vendor, to the extent
Prelex
Wording of sub-s. (5) in force until 1 October 2012 (when substituted wording, subject to footnote to new sub-s. (5), came into effect)
(5) If, in relation to any tax period of any vendor, the aggregate of the amounts that may be deducted under subsection (3) from the sum referred to in that subsection, the amount (if any) refundable to the vendor under section 15 (8), the amount (if any) brought forward from the tax period preceding the rst-mentioned tax period as provided in paragraph (ii) of the proviso to section 44 (1) and the amount (if any) credited under section 44 (4) to the vendor’s account during the rst-mentioned tax period, exceeds the said sum, the amount of the excess shall, subject to the provisions of this Act, be refundable to the vendor by the Commissioner as provided in section 44 (1).
17 Permissible deductions in respect of input tax
(1) Where goods or services are acquired or imported by a vendor partly for consumption, use or supply (hereinafter referred to as the intended use) in the course of making taxable supplies and partly for another intended use, the extent to which any tax which has become payable in respect of the supply to the vendor or the importation by the vendor, as the case may be, of such goods or services or in respect of such goods under section 7 (3) or any amount determined in accordance with paragraph (b) or (c) of the de nition of ‘input tax’ in section 1, is input tax, shall be an amount which bears to the full amount of such tax or amount, as the case may be, the same ratio (as determined by the Commissioner in accordance with a ruling as contemplated in Chapter 7 of the Tax Administration Act or section 41B) as the intended use of such goods or services in the course of making taxable supplies bears to the total intended use of such goods or services: Provided that—
[Wording preceding the proviso in sub-s. (1) substituted by
s. 271 of Act 28 of 2011 – date of commencement: 1 October 2012.]
(i) where the intended use of goods or services in the course of making taxable supplies is equal to not less than 95 per cent of the total intended use of such goods or services, the goods or services concerned may for the purposes of this Act be regarded as having been acquired wholly for the purpose of making taxable supplies;
[Para. (i) substituted by s. 31 (a) of Act 97 of 1993 and amended by s. 88 of Act 53 of 1999.]
(ii) where goods or services are deemed by section 9 (3) (b) to be successively supplied, the extent to which the tax relating to any payment referred to in that section is input tax may be estimated where the calculation cannot be made accurately until the completion of the supply of the goods or services, and in such case such estimate shall be adjusted on completion of the supply, any amount of input tax which has been overestimated being accounted for as output tax in the tax period during which the completion occurs and any amount of input tax which has been underestimated being accounted for as input tax in that period; and
(iii) where a method for determining the ratio referred to in this subsection has been approved by the Commissioner, that method may only be changed with effect from a future tax period, or from such other
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Juta’s IndIrect tax 2016