Page 60 - Juta's Indirect Tax

s 18
VALUE-ADDED TAX ACT 89 OF 1991 s 19
in which formula—
‘A’ represents the rate of tax levied in terms of section
7 (1); and ‘B’ represents—
(i) the cost to the vendor, that is an SEZ enterprise or an IDZ operator, of the acquisition of those goods or services which were supplied to him or her in terms of section 11 (1) (c), 11 (1) (m), 11 (1) (mA) or 11 (2) (k); or
(ii) the value to be placed on the importation of goods as determined in terms of section 13 (2).
[S. 18 amended by s. 103 (1) (a) of Act 32 of 2004.]
18A Adjustments in consequence of acquisition of going concern wholly or partly for purposes other than making taxable supplies
(1) Where—
(a) an enterprise or part of an enterprise has been supplied
to any vendor; and
(b) the supply of such enterprise or part was charged with
tax at the rate of zero per cent in terms of section 11
(1) (e); and
(c) such enterprise or part, as the case may be, or any
goods or services which formed part of such enterprise or part are acquired by such vendor wholly or partly for a purpose other than for consumption, use or supply in the course of making taxable supplies,
such enterprise, part, goods or services, as the case may be, shall be deemed to have been supplied by him by way of a taxable supply by him in the course of his enterprise: Provided that where the intended use of such enterprise, part, goods or services, as the case may be, in the course of making taxable supplies is equal to not less than 95 per cent of the total intended use of such enterprise, part, goods or services, as the case may be, the enterprise, part, goods or services concerned may for the purposes of this Act be regarded as having been acquired wholly for the purpose of consumption, use or supply in the course of making taxable supplies.
[Sub-s. (1) amended by s. 19 of Act 20 of 1994 and by s. 90 of Act 53 of 1999.]
(2) Notwithstanding anything in this Act, the value of the supply deemed by subsection (1) to have been made by the vendor, shall be the full cost to such vendor of acquiring such enterprise, part, goods or services, as the case may be, reduced by an amount which bears to the amount of such full cost the same ratio as the intended use or application of the enterprise, part, goods or services in the course of making taxable supplies bears to the total intended use or application of the enterprise, part, goods or services: Provided that—
the cost of such enterprise, part, goods or services shall be deemed to be the open market value of the supply of such enterprise, part, goods or services.
[Sub-s. (2) amended by s. 24 of Act 37 of 1996.]
(3) Notwithstanding anything in this Act, the supply deemed by subsection (1) to have been made by the vendor shall be deemed to be made in the tax period in which the supply of the enterprise or part of an enterprise is made.
(4) For the purposes of this section and sections 10 (9), 18 (4) and (5), the cost to the vendor of any goods or services acquired by a vendor in the circumstances contemplated in subsection (1) shall be deemed to be an amount equal to the aggregate of an amount which represents an appropriate allocation of the full cost to the vendor of the enterprise or part of an enterprise to those speci c goods or services and an amount determined by applying the rate of tax applicable at the time of supply contemplated in subsection (3) to the amount of such appropriate allocation.
[S. 18A inserted by s. 24 of Act 136 of 1992.]
18B Temporary letting of residential xed property
(1) For the purposes of this section ‘developer’ means a vendor who continuously or regularly constructs, extends or substantially improves fixed property consisting of any dwelling or continuously or regularly constructs, extends or substantially improves parts of that fixed property for the purpose of disposing of that fixed property after the construction, extension or improvement.
(2) Notwithstanding the provisions of section 18 (1), where goods being fixed property consisting of any dwelling—
(a) is developed by a vendor who is a developer wholly
for the purpose of making taxable supplies or is held
or applied for that purpose; and
(b) is subsequently temporarily applied by that vendor
for supplying accommodation in a dwelling under an
agreement for the letting and hiring thereof,
the supply of such fixed property shall, subject to subsection (3), be deemed not to be a taxable supply in the course or furtherance of that vendor’s enterprise.
(3) The fixed property contemplated in subsection (2) shall be deemed to have been supplied by that vendor by way of a taxable supply for a consideration as contemplated in section 10 (7) in the course or furtherance of that vendor’s enterprise at the earlier of—
(a) a period of 36 months after the conclusion of the agreement contemplated in subsection (2) (b); or
(b) the date that the vendor applies that fixed property
permanently for a purpose other than that of making
taxable supplies. (4) . . .
[Sub-s. (4) deleted by s. 175 (1) of Act 31 of 2013 –
deletion deemed to have come into operation on 10 January 2012 and applies in respect of goods being fixed property supplied on or after that date.]
[S. 18B inserted by s. 139 (1) of Act 24 of 2011 – date of commencement: 10 January 2012. This section ceases to apply on 1 January 2018 (‘2015’ replaced by ‘2018’ by s. 111 (1) of Act 43 of 2014 – date of commencement deemed to have been 10 January 2012).]
19 Goods or services acquired before incorporation
Any company, being a vendor, shall, where any amount of tax has been charged in terms of section 7 in relation to the acquisition of goods or services for or on behalf of that company or in connection with the incorporation of that company, and those goods or services were acquired prior to incorporation by a person who—
(i)
(ii)
the cost to such vendor of acquiring such enterprise, part, goods or services may be reduced by any amount which represents an appropriate allocation of such full cost to the acquisition of any goods or services which form part of such enterprise or part of an enterprise and in respect of the acquisition of which by the vendor a deduction of input tax would be denied in terms of section 17 (2); or
where such enterprise, part, goods or services were acquired—
(aa) by means of a supply made by a vendor for no
consideration or for a consideration in money which is less than the open market value of the supply; and
(bb) in circumstances where the supplier and the recipient are connected persons,
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Juta’s IndIrect tax 2016