Q&A notes: Third year:

VAT

All third year q&a notes

Q and A on section 10(4) of the VAT Act

Background

Mr Lane is a sole trader and VAT vendor. He sells luxury watches. He decides to sell 3 Rolex watches to his brother at a 20 per cent discount from the open market value of the watches.

VAT – tax periods

Q: Currently a company is paying VAT every second month. From which turnover should the company be paying monthly?

VAT – Time of supply for services rendered between connected persons

Q: If you have a management fee or advisory fee invoice dated January 2014 for services to be rendered for the quarter January 2014 – March 2014, when do you declare the output VAT on this invoice? The fee is between connected parties. Are you allowed to spilt the invoice and declare the output VAT separately in the following three months together with the input VAT? Or do you need to declare the whole invoice in the first month? Your advice would be highly appreciated.

3rd year VAT question

PART A

Interdict (Pty) Ltd is a category ‘C’ vendor i.e. it has a one-month VAT period. Interdict is a retailer of industrial machinery, and makes only taxable supplies. The following information is given for March 2014.

1. Ten machines were purchased at a cost of R 2 850 000 (incl. VAT); all machines have the same cost of R285 000 each (incl. VAT).

VAT Question 3rd years

Kingshaw Trading (Pty) Ltd (Kingshaw) is in the business of manufacturing fireworks. They sell to both the local market as well as the international market. Dee Colonel, who is the founder and CEO of the company, is very proud of the company’s growth. She started the company in her back yard five years ago, and today her company is selling fireworks across the globe. She owns 100% of the company.