Amendments to the VAT Act – New Registration Rules


The new registration rules 

Effective 1 April 2014 the following rules apply:

Compulsory registration 

• Where the actual value of taxable supplies has exceeded R1 million in any 12-month period (previous rules unchanged).

• Where any person has entered into an agreement in terms of which they will be obliged to make taxable supplies with a value in excess of R1 million in the next period of 12 months (new rule).

• Where a person conducts an enterprise of supplying electronic services with a value in excess of R50 000 (the VAT Act is not clear as to the time frame in which the value of supplies must be achieved) (new rule). 

Voluntary registration 

• Where the actual value of taxable supplies has exceeded R50 000 in any 12-month period (previous rule unchanged).

• The value of taxable supplies is likely to exceed R50 000 in the next period of 12 months.

– If registered on this basis, must account for VAT on the payments basis until the R50 000 threshold is achieved

– Regulations will be issued to govern this option (new rule).

• Due to the nature of activities a person will only generate taxable supplies in the future

– Should include vendors conducting farming, mining, construction and similar activities where the activity will only generate consideration in the future;

– Government Notice to be issued to notify the qualifying activities (rule unchanged except for the reference to the Government Notice).

Information courtesy of:  LexisNexis South Africa

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