18 Questions
What is the primary condition for a vendor to be considered a 'service' vendor and levying output VAT on sales?
Being registered or required to be registered for VAT
What type of persons are considered vendors, apart from companies and partnerships?
Municipality, deceased estate
What is the defining characteristic of an enterprise, as per the VAT Act?
An enterprise or activity carried on continuously or regularly
What type of supplies are exempt from VAT, and no tax is levied on them?
Exempt supplies
What type of activities are specifically excluded from being considered part of an enterprise?
Once-off private activities
What is the formula to calculate the VAT component of a taxable supply, given the tax rate 'r'?
r / (100 + r)
What type of organizations are specifically included in the definition of an enterprise?
Welfare organizations and implementing organizations
What type of lease agreements are specifically included in the definition of an enterprise?
Lease agreements involving a foreign lessor and a South African lessee
What is the rate at which VAT is levied on standard rated supplies?
15%
What is the meaning of 'supply' in the context of the VAT Act?
To provide or make available, including sale, rental agreement, ICA, and others, as well as barter transactions and certain transactions deemed to be supplies.
What is included in the definition of 'goods' for VAT purposes?
Corporeal things, fixed property, sectional title units, time shares, share in Share block company, and any real right to the above, as well as electricity.
What is the meaning of 'services' in the context of the VAT Act?
Granting, cession, or surrender of any right, making availability of any facility, and others, with a wide meaning.
What is meant by 'consideration' in the context of VAT, and how is it calculated?
Consideration is the payment in money or otherwise, including forbearance, in respect of a supply of goods. It is calculated as Value + VAT.
Which type of deposit is not subject to VAT?
A forfeitable deposit.
When must a person register for VAT, based on the value of taxable supplies?
A person must register for VAT at the end of the month when the total value of taxable supplies exceeds R1 million in the prior 12 months, or at the beginning of the month when the total value of taxable supplies is expected to exceed R1 million in the upcoming 12 months based on contractual agreements.
What type of supplies are excluded when assessing the R1 million threshold for VAT registration?
Supplies made for the closure or scale-down of an enterprise, supplies for the replacement of capital assets, and supplies caused by temporary or abnormal conditions.
What is the condition for a branch to register separately for VAT?
A branch can register separately if it maintains its own independent accounting system and is separately identifiable due to the nature of its activities or location.
What is included in the value of supplies when assessing the R1 million threshold for VAT registration?
Only taxable supplies, including zero-rated supplies, are included in the value of supplies. Exempt supplies are excluded.
Test your knowledge on the basics of Value Added Tax (VAT), including output VAT, input VAT, types of suppliers, and calculate VAT component of taxable supply.
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