Page 65 - Juta's Indirect Tax

s 22 VALUE-ADDED TAX ACT 89 OF 1991 s 22
the debtor in terms of the said agreement as, on the basis of an apportionment in accordance with the rights and obligations of the parties to the said instalment credit agreement, may properly be regarded as having been made in respect of the cash value;
(iii) the said tax content shall be an amount calculated by applying the tax fraction, as applicable at the time the supply under the said instalment credit agreement was in terms of section 9 (3) (c) deemed to have taken place, to the amount deemed as aforesaid to be irrecoverable in respect of such cash value;
[Para. (iii) substituted by GN 2695 of 8 November 1991 and by s. 27 (a) of Act 136 of 1992.]
(iv) a vendor who has transferred an account receivable at face value on a—
(aa) non-recourse basis to any other person, shall not make any deduction in respect of such transfer in terms of this subsection; or
(bb) recourse basis to any other person, may make a deduction in terms of this subsection only when such account receivable is transferred back to him and he has written off so much of the consideration as has become irrecoverable:
[Para. (iv) added by s. 36 (a) of Act 27 of 1997.] Provided further that the deduction provided for in this subsection shall not be made in terms of section 16 (3)—
(i) inrespectofanyamountwhichhasbecomeirrecoverable in respect of an instalment credit agreement, if the vendor has repossessed or is obliged to take possession of the goods supplied in terms of that agreement; or
[Para. (i) substituted by s. 177 (1) (a) of Act 31 of 2013 – date of commencement: 1 April 2014; the substituted paragraph applies in respect of goods surrendered on or after that date.]
(ii) in the case of any vendor who is required to account for tax payable on a payments basis in terms of section 15, except in relation to any supply made by him to which section 9 (2) (b) or section 9 (3) (c) applies. [Sub-s. (1) amended by s. 33 of Act 136 of 1991.]
(1A) Where a vendor—
(a) has made a taxable supply for consideration in money;
and
(b) has furnished a return in respect of the tax period for
which the output tax on the supply was payable (at the rate of tax referred to in section 7 (1)) and has properly accounted for the output tax on that supply as required in terms of this Act; and
(c) has transferred the account receivable relating to such taxable supply at face value to another vendor (hereinafter referred to as the recipient) on a non- recourse basis on or after the date of promulgation of the Taxation Laws Amendment Act, 1997,
and any amount of the face value (excluding any amount of nance charges or collection costs) of such account receivable has been written off as irrecoverable by such recipient, such recipient may make a deduction in terms of section 16 (3) of an amount equal to the tax fraction (being the tax fraction applicable at the time such taxable supply is deemed to have been made) of such face value (limited to the amount paid by the recipient in respect of such face value) written off by him, the deduction so made being deemed for the purposes of the said section to be input tax.
[Sub-s. (1A) inserted by s. 36 (b) of Act 27 of 1997.]
(2) Where any amount in respect of which a deduction has been made in accordance with subsection (1) is at any time wholly or partly recovered by the vendor, or becomes recoverable by him by virtue of the reassignment to him of the underlying debt, that portion of the amount of such deduction as bears to the full amount of such deduction
Juta’s IndIrect tax 2016
the same ratio as the amount of the irrecoverable debt recovered or reassigned bears to the debt written off shall be deemed to be tax charged in relation to a taxable supply made during the tax period in which the debt is wholly or partly recovered or reassigned to such vendor.
[Sub-s. (2) substituted by s. 27 (b) of Act 136 of 1992.]
(3) Subject to subsection (3A), where a vendor who is required to account for tax payable on an invoice basis in terms of section 15—
[Words in sub-s. (3) preceding para. (a) substituted by s. 140 (1) (b) of Act 24 of 2011 – date of commencement: 10 January 2012.]
(a) has made a deduction of input tax in terms of section 16 (3) in respect of a taxable supply of goods or services made to him; and
(b) has, within a period of 12 months after the expiry of the tax period within which such deduction was made, not paid the full consideration in respect of such supply,
[Para. (b) substituted by s. 95 of Act 30 of 1998.]
an amount equal to the tax fraction, as applicable at the
time of such deduction, of that portion of the consideration which has not been paid shall be deemed to be tax charged in respect of a taxable supply made in the tax period following the expiry of the period of 12 months: Provided that—
(i) the period of 12 months shall, if any contract in writing in terms of which such supply was made provides for the payment of consideration or any portion thereof to take place after the expiry of the tax period within which such deduction was made, in respect of such consideration or portion be calculated as from the end of the month within which such consideration or portion was payable in terms of that contract;
[Sub-para. (i) amended by s. 86 (b) of Act 20 of 2006.] (ii) where—
(aa) the estate of a vendor is sequestrated, whether voluntarily or compulsorily;
(bb) the vendor is declared insolvent;
(cc) the vendor has entered into a compromise in
terms of section 155 of the Companies Act, 2008 (Act 71 of 2008), or a similar arrangement with creditors; or
[Sub-para. (cc) substituted by s. 177 (1) (b) of Act 31 of 2013 – date of commencement: 1 April 2014.]
(dd) the vendor ceases to be a vendor as contemplated in section 8 (2),
within 12 months after the expiry of the tax period within which that deduction was made, not paid the full consideration, the vendor must account for output tax in terms of this section equal to that portion of the consideration which has not been paid—
(AA) at the time of sequestration, declaration of insolvency or the date on which the compromise or the arrangement or similar arrangement was entered into; or
(BB) immediately before the vendor ceased to be a vendor as contemplated in section 8 (2); or
[Sub-para. (ii) substituted by s. 86 (c) of Act 20 of 2006.] (iii) paragraph (ii) shall not be applicable where a vendor has already accounted for tax payable in accordance
with this subsection.
[Sub-para. (iii) added by s. 86 (d) of Act 20 of 2006 and substituted by s. 140 (1) (c) of Act 24 of 2011 – date of commencement: 10 January 2012.]
[Sub-s. (3) added by s. 25 of Act 37 of 1996 and amended by s. 36 (c) of Act 27 of 1997, by s. 110 (a) of Act 31 of 2005 and by s. 86 (a) of Act 20 of 2006.]
(3A) Subject to subsection (6) (a), subsection (3) shall not be applicable in respect of a taxable supply made by
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