VALUE ADDED TAX - Summary-TAX300 PDF

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INSTALLMENT CREDIT AGREEMENT VS RENTAL AGREEMENT:ICA: RA:Know definition (s1) - Know definition (s1)Finance Lease (Acc Link) - Operating Lease (Acc Link)Sold Asset on Day 1 - RA & Connected P. = Rules don’t applyVAT calc on Day 1 - Each period = separate supplyVAT not apportioned for cycle - VAL...

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OUTPUT VAT: - Levied @ 14% or 0%. - Levied on supply of G&S by a vendor, in the Republic in the course or furtherance of their enterprise. - Levied on sales. INPUT VAT: -VAT charged to a vendor by another vendor, on supply of G&S to him. - Only claim Input VAT if acquired by vendor wholly/partly for consumption, use, or supply in course of making taxable supplies.

DEFINITIONS (S1): 1. Person: Any Co., natural person, trust etc. 2. Enterprise: Any activity, carried on continuously, in RSA, in course/furtherance of which G&S are supplied for consideration. (provided that in leg.= exceptions) 3. Connected Persons: Nat. Person (relatives connected to 3rd degree of consanguinity, spouses and adopted affinity & trusts to which they are a beneficiary of). Co. (Any person who holds >10% shares or voting rights. 10%= Combo of holdings that spouse, minor child or trust have) (Example to follow): Spouse (5%), Minor Child (2%), Trust [Spouse (2%) & minor child (1%)]- Spouse and minor child= ben. of trust.

GENERAL ON VAT: - Must be carrying on an enterprise in or partly in RSA to register as a vendor. - Only register as a vendor if value of taxable supplies exceeds R1mil in 12 mnth period. (Compulsory Reg: consider existing and future businesses) - Voluntary Reg. if T/O of taxable supplies in 12 mnths is likely to be greater than R50k. (Foreign supplier of eservices) - Initial reg: all vendors account for VAT on pmt basis. Once T/O of R50k is reached, apply invoice basis. - Person may register for VAT if buying a GC, and seller of that GC has made taxable supplies > R50k with 12 mnths. - Refusal to reg: SARS can refuse to register if vendor has: 1. No fixed abode for business. 2. Proper acc. recs. not kept. 3. No separate b/acc for enterprise. - Cancellation of reg: Apply in writing to cancel. Vendor ceases to carry on enterprise within 21 days. SARS will also cancel if in 12 mnths, = R1.2mil - Cat. B: (2 mnths: F,A,J): T/S = R1.2mil - Cat. C: (1 mnth): T/S >R30mil (apply in writing) - Cat. D: (6 mnths: 28/29 Feb & 31 Aug): Farmers 28 days. If 95% TS = Claim 100% Input. *...