May 11, 2020

A&P services and zero-rated supplies

On 3 April 2020, the Supreme Court of Appeal delivered a judgement against Diageo South Africa (Pty) Ltd (“Diageo SA”) in a value-added tax (“VAT”) matter relating to the supply of advertising and promotion (“A&P”) services to various non-South African brand owners in the group. Diageo SA entered into an agreement with the foreign brand owners for the A&P of their products in South Africa. The brand owners invested in A&P to build and maintain brand recognition and generate sales by way of enhanced brand equity. The brand owners relied on Diageo SA to build their brands locally through A&P […]
August 23, 2019

What’s new in the world of tax?

On 21 July, National Treasury and the South African Revenue Service (SARS) released the second batch of draft tax amendments for the 2019 legislative cycle, which includes both proposed substantive tax amendments, and administrative changes. This follows the release of the first batch on 10 June 2019, dealing predominantly with addressing abusive arrangements aimed at avoiding the anti-dividend stripping provisions as well as aligning the effective date of tax-neutral transfers between retirement funds with the effective date of annuitisation for provident funds, which is 1 March 2021. Some of the main items addressed in the second round of draft bills […]
February 18, 2019

ZERO-RATING OF SERVICES TO NON-RESIDENTS

South African value-added tax (VAT) vendors are often unsure of the tax consequences of issuing invoices to foreign customers or clients and whether such services should be invoiced at the standard rate of 15% or be zero-rated. As is generally the case with tax (especially VAT), the answer is that it depends on the circumstances. Therefore, it is quite possible that services to a non-resident can be invoiced at the standard rate, or at a zero-rate. Importantly, section 11 of the VAT Act,[1] which deals with the zero-rating of supplies, distinguishes between the supply of goods (section 11(1)) and services […]
May 9, 2018

VALID TAX INVOICE REQUIREMENTS FOR VAT VENDORS

When making a purchase for your business, you should always ensure you receive a valid VAT invoice. This enables you to claim input VAT from SARS. With the change in VAT rate from 14% to 15%, VAT has come under the spotlight. This brings more focus on VAT compliance and more specifically on when we can claim input VAT on an invoice, and what constitutes a valid VAT invoice. This is something small that is very much neglected when it comes to monthly bookkeeping. It is very important to pay attention to the invoices that are sent to your accountants […]
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