Session 11 Principles of Taxation PDF (ICAG Level 2)

Session 11 Principles of Taxation Paper 2.6...

Session 11 Principles of Taxation Paper 2.6 (ICAG Level 2) MSL Business School The ICAG Principles of Taxation Paper 5 Questions - Answer ALL questions Ghanaian Tax Income Tax Corporate Tax Fiscal Policy - 5 marks Tax Administration System - 5 marks - 10 marks Liabilities - 20 marks Liabilities - 20 marks Basics of Taxation, GRA Individual and Partnership Assessments, Filing Company Income Tax, All Structure, Tax Residence, Income Tax (incl Capital Fiscal Policy, Public Debt, Returns, General concepts under Chargeable Tax Planning, Stamp Duty, Allowances), Employment, Grants & Local Government Compliance, Penalties, Income determination CST, VAT, Customs, Excise, Business, Investment Interest, Objection, Dispute Social Security Income Resolution, Refunds Taxation of Gains - Social Security & Value Added Tax Withholding Tax 5 marks Taxation of Gifts - 5 marks Pension Funds - (VAT) - 15 marks Admin - 10 marks Taxation of Gains and 5 marks Losses on realisation Scope, Registration, WHT on Goods, Works, Principles concerning (including shares and The 3-Tier System and Computation of VAT, Services, Investments, WHT taxation of gifts under Act securities) Computation, Compliance Compliance, VAT Exemptions, WHT Credit 896 Requirements and Filings Withholding, Customs Certificates, Compliance Duties, Excise Duties Requirements More than 50% of the marks is on THEORY/WRITTEN (not computational) questions (51, 56, 55, 63, 55 marks in recent past exams) - March 2023 was as high as 81 marks  Value Added Tax continued 15 marks MSL Business School Registration for VAT continued MSL Business School  REGISTRATION FOR VAT Notice of change in business Reference & Further Reading A taxable person is required to give notice to the Commissioner-General in writing if that person Section 18 of Act 870 ceases to operate; sells, or relocates the business engaged in the taxable activity; They are also required to give notice to the Commissioner-General in writing if there is change in the ownership of the business engaged in the taxable activity; or of a change ❑ in the name or address of that person; ❑ in the circumstances which disqualify that person for registration; or ❑ in a taxable activity or in the nature of taxable supplies being made. REGISTRATION FOR VAT Time to give notice of change in business Reference & Further Reading The notice shall be given within 14 calendar days after the cessation, sale, relocation, change of ownership or any other change as the case may be. Section 18 of Act 870 Where a person ceases to carry on a taxable activity in relation to which the registration was made, the notice shall be made within 14 calendar days after the date of the cessation and shall state whether or not that person intends to carry on a taxable activity within 12 months from that date. Sale of business as a going concern A taxable person who commences the sale of a business as a going concern shall give notice in writing to the Commissioner-General of that fact at least 14 calendar days before the sale closes, purchaser acquires any legal interest in the assets to be acquired, or assets of the going concern are transferred, whichever date is earliest.  CANCELLATION OF REGISTRATION Cancellation of Registration Reference & Further Reading The Commissioner-General shall cancel the registration of a taxable person where the Commissioner-General is satisfied that the taxable person Section 19 of Act 870 no longer exists; is not carrying on a taxable activity; is not required or entitled to apply for registration; has no fixed place of business or abode; has not kept proper accounting records related to a business activity carried on by that person; or has not submitted regular and reliable tax returns required under the VAT Act Effective Date of Cancellation A cancellation takes effect from the end of the tax period in which the registration is cancelled, or from any other date determined by the Commissioner-General. CANCELLATION OF REGISTRATION Effect of Cancellation Reference & Further Reading Subject to the below, a taxable person whose registration is cancelled is regarded as having made a taxable supply of the goods on hand, including capital goods, at the Section 19 of Act 870 time the registration is cancelled. For the purposes of the above, there is no taxable supply with respect to specific goods on hand if the taxable person was denied an input tax deduction on the acquisition of those goods. The obligations and liabilities of a person under the VAT Act and the Regulations, including the submission of returns in respect of anything done or omitted to be done by that person as a taxable person, is not affected by the cancellation of the person’s registration.  CANCELLATION OF REGISTRATION (continued) Effect of Cancellation Reference & Further Reading The Commissioner-General shall serve notice in writing on a person of the decision to cancel or refuse to cancel a registration within 30 days Section 19 of Act 870 (a) after making the decision; or (b) after receipt of the application. Where registration is cancelled, the person shall return to the Commissioner-General, the VAT certificate and any unused VAT invoices, and the Commissioner-General shall remove the personal particulars of that person from the register. A person registered for VAT voluntarily may apply for cancellation of the registration only after the expiration of 2 years after the date the registration took effect. Subject to the above, a taxable person who ceases to carry on the business in relation to which the registration was made and who is not engaged in any other taxable activity, shall apply in writing to the Commissioner-General for cancellation of the registration within 30 days after the cessation of the business. Supply of Goods & Services MSL Business School  SUPPLY OF GOODS & SERVICES Supply of goods and services Reference & Further Reading Except as otherwise provided in the VAT Act and the Regulations, “supply of goods” means an arrangement under which the owner of the goods parts Section 20 of Act 870 with possession of the goods, by way of sale, barter, lease, transfer, exchange, gift or similar disposition, and “supply of services” means a supply which is not a supply of goods or money, and in the nature of (i) the performance of services for another person; (ii) the making available of a facility or advantage; or (iii) tolerating a situation or refraining from doing an activity. The supply of money For purposes of defining a “supply of goods”, supply of goods does not include the supply of money. SUPPLY OF GOODS & SERVICES Disposal of a taxable activity Reference & Further Reading The disposal of a taxable activity, or Section 20 of Act 870 part of a taxable activity that is capable of being operated separately as a going concern, is a supply of goods made in the course or furtherance of the taxable activity. For the purposes of the above, a taxable activity or a part of a taxable activity that is capable of being operated separately is disposed of as a going concern where the goods or services necessary for the continued operation of that taxable activity or that part of the taxable activity are supplied to the transferee; and the transferor carries on or is carrying on, that taxable activity or that part of a taxable activity up to the time of its transfer to the transferee.  SUPPLY OF GOODS & SERVICES Reference & Further Important Reading A supply of goods for goods or services is a supply of goods Section 20 of Act 870 A supply of services for services or goods is a supply of services Subject to Sections 24 (2) [The transfer of goods to a person acting in a representative capacity to the transferor is not a supply of goods] and Section 25 [Effect of denial of input tax], the application by a taxable person of goods or services acquired for use in a taxable activity to a different use, which includes the provision of goods or services to an employee for personal use, is a supply of those goods or services by the taxable person in the course or furtherance of that taxable activity. SUPPLY OF GOODS & SERVICES Separate Supply Reference & Further Where a supply of goods or services consists of both a supply that is charged with tax at Reading a positive rate and Section 23 & 24 of a supply of goods with tax at a zero rate; or Act 870 an exempt supply each part of the supply of goods or services is treated as a separate supply of goods or services if each part is reasonably capable of being supplied separately. Activities that do not constitute supply of goods or services A supply of services by an employee to an employer by reason of the employment of that employee is not a supply of services for VAT purposes The transfer of goods to a person acting in a representative capacity to the transferor is not a supply of goods.  SUPPLY OF GOODS & SERVICES Effect of denial of input tax Reference & Further Reading Except otherwise provided in the VAT Act, where a taxable person supplies goods or services and a deduction for input tax paid on the acquisition of the goods or services Section 25 & 27 of was denied, the supply of the goods or services by the taxable person is a supply of Act 870 goods or services other than in the course or furtherance of a taxable activity. Supply of power and others as supply of goods The supply of any form of power, heat, refrigeration or ventilation is a supply of goods SUPPLY OF GOODS & SERVICES Mixed supplies Reference & Further Reading A supply of services incidental to a supply of goods is part of the supply of goods; Section 31 of Act 870 goods incidental to a supply of services is part of the supply of services; and services incidental to an import of goods is part of the import of the goods. Note Despite bullets 1 and 3 above, a supply of real property does not include the supply of services incidental to that supply or the import of services incidental to that supply.  SUPPLY OF GOODS & SERVICES Supply by agent or auctioneer Reference & Further Reading A supply of goods or services made by a person as an agent for another person who is the principal is a supply by the principal Section 32 of Act 870 The above does not apply to the supply of services of an agent as agent to the principal. A supply of goods by auction is for the purposes of the VAT Act treated as a supply of goods by the auctioneer for consideration in the course or furtherance of a taxable activity carried on by the auctioneer. Taxable Supplies MSL Business School  SUPPLY OF GOODS & SERVICES Taxable Supply Reference & Further Reading Except as otherwise provided in the VAT Act or Regulations, a taxable supply is a supply of goods or services made by a taxable person for consideration, other than an exempt Section 33 & 34 of supply, in the course of, or as a part of, taxable activity carried on by that taxable Act 870 person. Payment of tax on importation of goods or services Except as otherwise provided in the VAT Act or the Regulations, on the import of goods, ❑ the Commissioner-General shall make arrangements to collect, at the time of import, tax due under this Act; and ❑ the Customs Act, 2015 (Act 891), relating to the import, transit, coastwise carriage, clearance of goods, and payment and recovery of duty applies, so far as is relevant, to the tax charged under this Act or the Regulations, with the exceptions, modifications, and adaptations that the Minister may by Regulations prescribe; and SUPPLY OF GOODS & SERVICES (continued) Payment of tax on importation of goods or services Reference & Further on the import of services, tax is payable as provided under section (Payment of tax on Reading import of services) Section 34 & 35 of Act 870 The Commissioner-General shall make arrangements for the collection of tax in relation to an import of goods through the postal services. Exempt supply The supply of goods and services specified in the First Schedule is an exempt supply and not subject to the tax. A supply of goods or services is not an exempt supply if that supply is subject to tax at the rate of zero percent under section 36 (Zero-rated supply)  Taxable Supplies (Exempt Supplies) MSL Business School EXEMPT SUPPLIES (FIRST SCHEDULE) Exempt Supplies Reference & Further A supply of the following agricultural and aquatic food products in a raw state Reading produced in the country First Schedule of Act (a) maize; 870 (b) sorghum; (c) millet; (d) tubers; (e) guinea corn; (f) rice; (g) fish, and other ornamental fish; (h) crustaceans; (i) mollusks; (j) vegetables and fruits; (k) nuts;  EXEMPT SUPPLIES (FIRST SCHEDULE) (continued) Exempt Supplies Reference & Further (l) coffee; Reading (m) cocoa; First Schedule of Act 870 (n) shea butter; and (o) edible meat and offal of the animals listed in paragraph 5, provided that the processing is restricted to salting, smoking or similar processes, but excluding pate, fatty livers of geese and ducks, and similar products. Note: For the purposes of paragraph 3 (above), the agricultural and aquatic food products shall be considered to be in their raw state, even if they have undergone simple preparation or preservation, including freezing, chilling, drying, salting, smoking, stripping or polishing. EXEMPT SUPPLIES (FIRST SCHEDULE) (continued) Exempt Supplies Reference & Further Reading A supply of the following live animals bred or raised in the country: (a) cattle; First Schedule of Act 870 (b) sheep; (c) goat; (d) swine; and (e) poultry. A supply of the following agricultural inputs (a) seeds, bulbs, rooting, and other forms of propagation of edible fruits, nuts, cereal crops, tubers and vegetables, including the seedlings and cuttings; and (b) fertilizers, acaricides, insecticides, fungicides, nematicides, herbicides, growth regulators, pesticides, veterinary drugs and vaccines, feed and feed ingredients other than food, drugs and vaccines for domesticated animals generally held as pets.  EXEMPT SUPPLIES (FIRST SCHEDULE) (continued) Exempt Supplies Reference & Further Reading (a) A supply of gear designed exclusively for fishing, including boats, nets, floats, twines, and hooks; and First Schedule of Act (b) An import and supply of raw material for use in the production of nets and twines 870 and goods produced for fishing. A supply of water, excluding water commonly supplied in bottles or other packaging suitable for supply to consumers. A supply to a dwelling of electricity up to a maximum consumption level specified for block charges for lifeline units. (1) A supply of textbooks and supplementary readers on the Ministry of Education approved list, newspapers, atlases, charts, maps and music; and (2) The exemption above does not apply to imported textbooks, imported newspapers, architectural plans and similar plans, drawings, scientific and technical works, periodicals, magazines, trade catalogues, price lists, greeting cards, almanacs, calendars, diaries and stationery and other printed matter. EXEMPT SUPPLIES (FIRST SCHEDULE) (continued) Exempt Supplies Reference & Further Reading A supply of education services First Schedule of Act 870 A supply of laboratory and library equipment for use in rendering educational services A supply of medical services and medical supplies A supply of pharmaceuticals in Ghana; ○ A supply or import of the active ingredients and selected inputs for the manufacture of pharmaceuticals as determined by the Minister for Health and as prescribed in Regulations; and ○ An import of selected drugs or pharmaceuticals as determined by the Minister for Health and prescribed in the Regulations.  EXEMPT SUPPLIES (FIRST SCHEDULE) (continued) Exempt Supplies Reference & Further Reading A supply of domestic transportation of passengers by air, road, rail and water, except the supply of haulage or the rental or hiring of passenger and other vehicles. First Schedule of Act 870 A supply of machinery and parts of machinery specifically designed for use in the following activities: (a) agriculture, veterinary practice, fishing and horticulture; (b) mining as specified in the mining list; (c) manufacturing; (d) railway and tramway; (e) upstream petroleum operations as specified in the petroleum list; and (f) dredging. EXEMPT SUPPLIES (FIRST SCHEDULE) (continued) Exempt Supplies Reference & Further Reading A supply of crude oil and the following hydrocarbon products: (a) petrol; First Schedule of Act 870 (b) diesel; (c) liquefied petroleum gas; (d) kerosene; (e) residual fuel oil; and (f) natural petroleum gas. A supply of financial services, excluding non-life insurance A supply of goods designed exclusively for use by persons with disability A supply of postage stamps issued by the Ghana Post, other than for expedited services or for philatelist purposes  EXEMPT SUPPLIES (FIRST SCHEDULE) (continued) Exempt Supplies Reference & Further A supply of the following: Reading (a) immovable property, including land, used or intended to be used for the purpose of First Schedule of Act dwelling but excluding the supply of immovable property by an estate developer; 870 (b) accommodation in a dwelling; (c) land used or to be used for agricultural purposes; and (d) civil engineering public works, including roads and bridges. A supply of salt for human consumption, including table salt A supply of mosquito nets, whether or not impregnated with chemicals A supply of paper for the production of exercise books and textbooks An import of mild carbon steel for the manufacture of machetes EXEMPT SUPPLIES (FIRST SCHEDULE) (continued) Exempt Supplies Reference & Further Reading The acceptance of a wager or stake in any form of betting or gaming, including lotteries and from gaming machines First Schedule of Act 870 Importation of plant and machinery designed specifically for use in the automobile industry and kits by an automobile manufacturer or assembler who is registered under the Ghana Automotive Manufacturing Development Programme Importation of electric vehicles for public transportation Management fees charged by a local fund manager for management of a licensed private equity fund, a venture capital fund or a mutual fund.  SUPPLY OF GOODS & SERVICES Zero-rated supply Reference & Further A taxable supply is taxable at a zero rate if the supply is specified in the Second Reading Schedule Section 36 & 37 of Where a taxable person has applied the rate of zero percent to a supply under this Act 870 section, the taxable person is required to obtain and retain the documentary proof that is acceptable to the Commissioner- General and that substantiates the person’s entitlement to apply the zero rate to the supply. Exempt import An import of goods is an exempt import if the goods are exempt under the First Schedule or classified as an exempt import in conformity with the Customs Tariff Schedule also known as the “Harmonised System”. Taxable Supplies (Zero-Rated Supplies) MSL Business School  ZERO-RATED SUPPLIES (SECOND SCHEDULE) Zero-rated Supplies (Supply of Goods) Reference & Further Reading A supply of goods where the supplier has entered the goods for export pursuant to the Second Schedule of Customs Act (2015), Act 891, and the goods have been exported from the country by Act 870 the supplier A supply of goods where the Commissioner-General is satisfied that the goods have been exported from the country by the supplier without having been used in the country after the supply was entered, except as necessary for or incidental to, the export of the goods A supply of goods under a rental agreement, charter party or agreement for chartering, where the goods are used exclusively in an export country. ZERO-RATED SUPPLIES (SECOND SCHEDULE) (continued) Zero-rated Supplies (Supply of Goods) Reference & Further Reading A supply of goods shipped as stores on foreign-going vessels or foreign-going aircraft Second Schedule of leaving the territories of Ghana and going to a destination in an export country Act 870 A supply to a free zone developer or free zone enterprise, provided that the developer or enterprise provides satisfactory documentation that its operations and the procedure for acquisition of the supply satisfy the requirements of the Free Zone Act, 1995 (Act 504) A supply of goods as part of the transfer of a taxable activity as a going concern by one taxable person to another taxable person, but only if ▪ section 19 and subsection (4) of section 18 are satisfied; and ▪ the notices, including the details of the transaction, required by Regulations are provided to the Commissioner-General.  ZERO-RATED SUPPLIES (SECOND SCHEDULE) (continued) Zero-rated Supplies (Supply of Goods) Reference & Further Reading The Minister may, by Regulations, provide for the zero-rating of exports of goods by tourists and similar persons, under such terms and conditions as the Minister shall Second Schedule of Act specify 870 A supply of goods shall not be considered to be exported from this country unless (a) immediately before being put on board the conveyance for export, the goods are produced to the Commissioner of Customs for examination; (b) on demand by Commissioner of Customs, the exporter provides samples of the goods as the Commissioner may require for testing or in any other purpose (c) the person in charge of the conveyance for the export or any other person that the person in charge may authorise for purpose, certifies on the document on which the goods are entered that the goods have been received in board; and (d) particulars of the goods are included in the cargo manifest of the conveyance. A supply of the goods shall not be considered to be exported from this country if the supply has been or will be re-imported to this country by the suppliers. ZERO-RATED SUPPLIES (SECOND SCHEDULE) (continued) Zero-rated Supplies (Supply of Goods) Reference & Further Reading A supply of locally manufactured textiles up to 31st December, 2023 2025 by a local Second Schedule of Act manufacturer who has been approved by the Minister responsible for Trade and 870 Industry A supply of locally assembled vehicles under the Ghana Automotive Development Programme from 1st September, 2022 to 31st December, 2023 2025 The supply of locally manufactured sanitary towels  ZERO-RATED SUPPLIES (SECOND SCHEDULE) Zero-rated Supplies (Supply of Services) Reference & Further Reading A supply of services directly in connection with land or any improvement to land situated outside the country Second Schedule of Act 870 A supply of services directly in respect of personal property situated outside the country at the time the services are rendered A supply of services to the extent that the services are consumed elsewhere than in the country A supply of services comprising the filing, prosecution, granting, maintenance, transfer, assignment, licensing or enforcement of any intellectual property rights for use outside the country A supply of freight and insurance directly attributable to the export of goods SUPPLY OF GOODS & SERVICES Relief supply Reference & Further The Minister may, by legislative instrument, make Regulations to grant relief from tax Reading on taxable imports of goods or taxable supplies of goods acquired in the country to the persons specified in the Third Schedule Section 38 of Act 870 For the purposes of the above, the Minister shall specify the method by which the persons entitled to relief shall obtain that relief, subject to restrictions that the Minister considers fit When the relief provided for under this section is by refund, a claim for a refund of tax shall be made in the form and at the time that the Minister may prescribe, and shall be accompanied by proof of payment of tax For the purposes of point 1 above, the relief does not apply to raw materials, parts and services that are or may become components of the goods in respect of which relief is granted. Note: This does not apply in the case of relief granted under item 7 of the Third Schedule (relief for VAT-registered manufacturers for raw materials at importation subject to some conditions)  Taxable Supplies (Relief Supplies) MSL Business School RELIEF SUPPLIES (THIRD SCHEDULE) Reference & Further Relief Supplies Reading The President of the Republic Third Schedule of Act 870 Subject to bullet 4 below, a supply for the official use of any Commonwealth or Foreign Embassy, Mission or Consulate Subject to bullet 4 below, a supply for the use of a permanent member of the Diplomatic Service of any Commonwealth or foreign country that is exempted by Parliament from the payment of customs duties The relief provided in bullets 2 and 3 above applies only if a similar privilege is accorded by the Commonwealth or foreign country to the Ghana representative in that country A supply for the use of an international agency, or technical assistance scheme where the terms of agreement made with the Government and approved by Parliament include exemption from domestic indirect taxes  RELIEF SUPPLIES (THIRD SCHEDULE) (continued) Relief Supplies Reference & Further Emergency relief items approved by Parliament Reading Third Schedule of Act 870 VAT-registered manufacturers for raw materials at importation, subject to the condition that: ❑ the manufacturer is a member in good standing of the Association of Ghana Industries; ❑ the manufacturer has submitted all previous tax returns and paid the tax, penalties and interest from previous tax periods if any; ❑ the Commissioner-General is satisfied that the manufacturer has met the conditions in bullets 1 and 2 above and other compliance requirements of the VAT Act and has listed the manufacturer in a register published by the Commissioner-General with a validity period of twelve months effective from 1st January of each year; ❑ the imported raw materials will be applied solely and exclusively for the manufacturing operations of the relief beneficiary. Upfront Payment by Unregistered Importer MSL Business School  Upfront Payment by Unregistered Importer Reference & Further A person who Reading imports taxable goods; and Section 15A of Act 870 is not registered for the tax is, in addition to the penalty provided in section 15, liable to make an upfront S. 15 - A person who payment of twelve and a half percent (12.5%) of the customs value of the taxable fails to apply for goods. registration is liable to a penalty of not more than two times the amount of tax on taxable supplies A person may recover an upfront payment above after the person registers and files payable from the time a return. the person is required to apply for registration until the person files an application for registration with the Commissioner-General. Time & Place of Supply MSL Business School  TIME OF SUPPLY Time of supply rules Reference & Further Except as otherwise provided in the VAT Act or Regulations, a supply of goods or services Reading occurs, Section 39 of Act 870 where the goods or services are applied to own use, on the date on which the goods or services are first applied to own use; where the goods or services are supplied by way of gift, on the date on which ownership in the goods passes or the performance of the services is completed; in any other case, the earliest of the dates on which ✔ the goods are removed from the premises of the taxable person, or from other premises where the goods are under the taxable person’s control; ✔ the goods are made available to the person to whom they are supplied; ✔ the performance of services is completed; ✔ receipt of payment is made; or ✔ a tax invoice or sales receipt is issued. TIME OF SUPPLY (continued) Time of supply rules Reference & Further Where under bullets (iv) and (v) above, payment is received or a tax invoice or sales Reading receipt is issued for part of the supply, this section applies only to the part of the supply represented by the payment or the tax invoice. Section 39 of Act 870 Where metered supplies are made on a continuous basis, the time of supply is at each meter reading The supply of goods under a hire purchase agreement or finance lease occurs on the date the goods are made available under the agreement or lease. Where goods are supplied under a rental agreement, or goods or services are supplied under an agreement or law which provides for periodic payments, the goods or services shall be considered as successively supplied for successive parts of the period of the agreement or as determined by that law, and each successive supply occurs on the date on which payment is due or received, or that the invoice is issued, whichever date is earlier.  TIME OF SUPPLY (continued) Time of supply rules Reference & Further Reading For the purposes of this section, where two or more payments are made or are to be made for a supply of goods or services, other than a supply to which subsection (4) – Section 39 of Act 870 hire purchase/finance lease or (5) – rental agreement/periodic payments applies, each payment shall be regarded as made for a separate supply to the extent of the amount of the payment on the earlier of the dates that the payment is due or received Note: the term “rental agreement” means any agreement for the letting of goods other than a hire purchase agreement or finance lease Where the supply of goods or services is incidental to another supply, the time of supply of the incidental supply shall be considered to be the same as the time of supply for the main goods or services A supply of goods in accordance with a lay-away agreement occurs when the goods are delivered to the purchaser TIME OF SUPPLY (continued) Time of supply rules Reference & Further A supply of goods that have been repossessed under section 21 occurs Reading (a) when the goods are repossessed; or Section 39 of Act 870 (b) where the debtor may under a law be reinstated with that debtor’s rights and obligations under the credit agreement, the day after the last day of any (c) period during which the debtor may under that law be so reinstated. A supply of goods made through a coin-operated machine occurs when the supplier withdraws the consideration from the coin-operated machine The forfeit of a deposit, other than on a returnable container, occurs when the deposit is forfeited To the extent that the issuance of a token, voucher, gift certificate, or stamp referred to in section 30(2) is a supply, the supply occurs when the token, voucher, gift certificate, or stamp is issued  TIME OF SUPPLY (continued) Time of supply rules Reference & Further The Minister may, by legislative instrument, make Regulations to prescribe rules to Reading determine the time of a supply of particular goods or services. Section 39 & 40 of Act 870 Time of import An import of goods occurs when the goods are entered for purposes of the Customs Act, 2015 (Act 891) An import of services occurs at the time determined by the application of section 39 – time of supply to the import on the basis that the import is a supply of services PLACE OF SUPPLY Place of supply rules Reference & Further Except as otherwise provided in the VAT Act, the place of supply of goods is the place Reading where the goods are delivered or made available by the supplier or, if the delivery or making available of the goods involves the goods being transported, the place where the goods are when the transportation commences Section 42 of Act 870 A supply of thermal or electrical energy, heating, gas, refrigeration, air conditioning, or water takes place where the supply is received Subject to this section and Regulations, a supply of services takes place at the location of the place of business of the supplier from which the services are supplied The supply of the following services takes place where the recipient uses the service, including: (a) a transfer or assignment of a copyright, patent, licence, trademark, or similar right;  PLACE OF SUPPLY (continued) Place of supply rules Reference & Further (b) the service of a consultant, engineer, lawyer, architect, accountant or other professionals; Reading (c) the processing of data or supplying information, or any similar service; Section 42 of Act 870 (d) an advertising service; (e) the obligation to refrain from pursuing or exercising taxable activity, employment, or a right described in this subsection; (f) the supply of personnel; (g) the service of an agent in procuring for the agent’s principal a service described in this subsection; or (h) the leasing of tangible personal property other than transport property. Unless the service is described in subsection (4) - above, (a) the supply of cultural, artistic, sporting, educational, or similar activities takes place where the service is physically carried out; and (b) the supply of services connected with tangible personal property takes place where the service is physically carried out PLACE OF SUPPLY (continued) Place of supply rules Reference & Further Unless the service is described in subsection (4) - above, the supply of services Reading connected with real property takes place where the property is located Section 42 of Act 870 Unless the service is described in subsection (4) - above, a supply of services incidental to transport takes place where the transportation occurs Services supplied from a place of business in the country which would be treated as supplied outside the country under subsections (4) to (7) are considered as exported from the country The place of supply of a right to services is the same as the place for the supply of the services made by the supplier of the right to the recipient of the right whether or not the right is exercised Note: right to services includes any right, option or priority with respect to the supply of services and an interest derived from a right to services.  PLACE OF SUPPLY (continued) Place of supply rules Reference & Further In the case of telecommunications service described in section 16, the place of supply Reading is Section 42 of Act 870 (a) the place where the facility or instrument for the emission, transmission or reception of the service in respect of which the invoice for the supply is issued or is to be issued, is ordinarily situated; or (b) the place where the effective use and enjoyment occurs In the case of electronic commerce described in section 16, the place of the supply is the place where the effective use and enjoyment occurs The place of supply of a recharge card or other similar mode of recharging is the place where the product is supplied