VAT Archives

I recently had a call about whether student accomodation is a VATable supply. This is an important consideration if you are planning to buy a property for that purpose. I could not answer off the top of my head, so had to do some research and surprise, surprise, there is no simple answer. The South African Institute of Chartered Accountants discuss the matter in some detail, but I have to confess, that after studying the article several times, I still don’t know the answer to the question. In essence, the question is whether the agreement is…

It’s quick to form a company these days – about a week. But there are still some benefits to buying an existing shelf company rather than registering a new company. Benefits of buying an existing shelf company: 1. Time constraints due to tenders You might need a company NOW. This would typically be when you want to submit a quotation or tender and the customer will only buy from a registered company. 2. Specific company needs You may need a company with a particular registration such as VAT, Importer/Exporter and cannot wait while the registration goes…

There’s no VAT charge on letting of residential property, but be careful if you own a residential hotel, frail care facility, retirement home or similar long term accommodation So, you own a house or a residential unit and rent it out. That is not a vatable supply. If you own commercial property for rental, then that is vatable at the current rate of 15%. It gets interesting if someone stays in your guest house, B&B, hotel, retirement home, frail care home or the like. If the person stays for 28 days or less, then the full amount of charges attracts…

So, you’ve read Company Basics and Trust Basics. Now here are some Tax Basics for companies. 1) There are three tax returns each year. The first and second provisional returns which must be submitted in August and February of the company’s tax year if the company year end is February, then the Annual Tax Return which is also submitted in February, but a year later. 2) The first and second provisional returns are based on the last assessed income, so until the company has…

There are several taxes that you need to be familiar with if you invest or trade in fixed property. Income Tax The seller will pay Income Tax on the sale of property which was bought (and perhaps renovated) with the object of selling at a profit. The taxable income will be added on top of any other taxable income earned by the seller before calculating the total tax (at 28% for companies and up to 45% for individuals). Capital Gains Tax (CGT) The seller will pay CGT on the sale of property which was bought (and perhaps renovated) with the…

When I recently checked our most read blog posts, I found that the explanation of Input and Output VAT was the most read at 8775, followed by an explanation of Exempt and Zero rated supplies at 8502. Clearly, there’s a big need for this sort of information so here’s a more complete guide – Output VAT VAT is charged by VAT registered vendors on most of their sales. They pay the VAT over to SARS as Output VAT (think of goods and services going OUT[put] from the vendor). Certain goods (particularly some foods) and services (such as interest…

Output VAT VAT is charged by VAT registered vendors on most of their sales. They pay the VAT over to SARS as Output VAT (think of goods and services going OUT from the vendor). Input VAT VAT is claimed back from SARS by registered vendors as Input VAT (think of it as the VAT on goods and services coming IN to the vendor). Input VAT cannot normally be claimed in respect of certain supplies including entertainment, staff welfare, motor cars including twin-cabs. The VAT in bad debts written off can be claimed back as input VAT.

Zero-rated supplies A fairly wide range of basic foodstuffs together with diesel, petrol and illuminating paraffin are zero-rated as distinct from exempt. This means that the customer pays no VAT, but the supplier can, if VAT registered, claim input VAT because they are making VATable supplies (albeit at a rate of zero). Exports are also zero-rated. If a business is sold as a going concern by a VAT registered vendor to another VAT registered vendor along with the assets necessary for the business to continue as a going concern and as long as a number of conditions are…

The following table applies if the property is to be used by the purchaser to make predominantly VATable supplies – typically rental of commercial but not residential premises. . Should you wish to make an appointment, please feel free to visit Derek’s diary and book a time that suits you. . Need a shelf company or CC, a tax clearance, VAT registration or B-BBEE certificate? We offer a wide range of such services.

VAT

VAT on student accommodation

Shelf companies serve a very useful purpose

VAT on Residential letting

Tax basics

Property Investment and Related Taxes

VAT. How it works, whether to register and how to register

VAT and how it works

VAT Zero-rated and Exempt Supplies

VAT and Transfer Duty