If you are asked to discuss a VAT question, you must always consider the following in your answer:
Section 178 of the Taxation Laws Amendment Act (No. 31 of 2013) (TLAA) amended section 23 of the VAT Act as follow (paragraph (a), (c) and (d) of subsection 1 of the TLAA will come into operation on 1 April 2014 and paragraph (b) of subsection 1 of the TLAA will also come into operation on 1 April this year, but will only apply to electronic services supplied on or after 1 April this year):
If a company gives the right of use of a motor to an employee the following will ALWAYS be applicable:
1. For the employee: The employee receives a fringe benefit in terms of the 7th schedule. The amount has to be determined in accordance with the 7th schedule and included in the taxable income of the employee.
A Recreational Club can be regarded as an ‘association not for gain’ in terms of section 1 of the Value Added Tax Act. If the requirements regarding compulsory or voluntary VAT registration as set out in section 23 of the Value Added Tax Act are satisfied, the club will be required to / may register as a VAT vendor.