Vat Matters: Include these 5 documents in your ruling application NOW – and get the green light from SARS

Dear Reader,

Although SARS withdrew the majority of written rulings back in 2009, it’s good to know you can still apply for a new ruling. But only in certain cases – which will mostly have something to do with changing your apportionment method from the turnover-based method.

Remember: The turnover-based method is currently the only standard method which you, as the vendor can use to apportion input tax, without getting it rubber stamped by SARS beforehand.

Refer to chapter A01 in your Practical Vat Loose Leaf for more information on apportionment.
 
What is a ruling?

It’s a written statement from SARS, usually explaining how it has interpreted the Vat law in a particular situation. If you apply for one, it’s a good idea to follow SARS’s interpretation because they’re the guys who’ll tell you if you need to pay more (or hopefully less) Vat…

How to get a new ruling

Submit an application for a Vat ruling or a binding private ruling, together with a number of supporting documents. Don’t leave any of the supporting documents out; otherwise your ruling application could be dismissed or delayed!

Checklist: Attach these 5 supporting documents when you apply for a new ruling

1.    Your  name, Vat number (if applicable), address, contact details e.g. phone, fax, email, etc.), and if applicable;

2.    The contact details of your representative;

3.    A complete description of all the transactions concerned, and the impact on the applicant’s Vat liability (or on any connected person in relation to the applicant);

4.    A clear statement about the issue at hand, or the specific request which you’d like SARS to rule on; and

5.    The relevant provisions in the Vat Act that apply to this issue.

TIP

There’s no specific form you must complete. You need to  put your entire application in writing – including the supporting documentation. And remember to address it to the SARS office where you’re registered!

Important

Make it clear the issue you’re getting a ruling on isn’t the subject of an audit, investigation, objection or appeals process, or a matter which is being considered by a court, and in which you or your connected persons are involved.

Remember: There are a bunch of rulings which don't require confirmation from SARS – you can use them freely! You’ll find the complete list of these rulings on page V03/008 in your Practical Vat Loose Leaf.

Brush up on your rulings knowledge now by…

…paging to chapter V03 in your Practical Vat Loose Leaf.

In this chapter we discuss rulings in detail and cover the following topics:

·         Written rulings prior to 1 January 2007;

·         SARS gave the following cut-off dates;

·         Rulings in the Rulings Register;

·         Checklist: 5 Practice Notes that have been withdrawn;

·         Section 72 rulings;

·         Rulings on apportionment methods;

·         Checklist: 7 Documents to include in your apportionment ruling application;

·         Rulings that you don’t need confirmation for;

·         Checklist: 5 supporting documents to attach when you apply for a new ruling;

·         6 Important points to remember about rulings.

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I know you‘ll put this rulings information to good use - it could be the lifeline you were looking for.  Remember this: If you do something WITHOUT getting a ruling from SARS, and you’re caught out, you’ll be held liable for penalties – and that’s just for starters. But if you act on a ruling, SARS can’t lynch you later! After all, you simply did what SARS suggested…

Are you interested in discovering even more business lifelines, tips, tools and advice? Take a look at this week’s hottest tax, Vat and accounting topics.

Monday - Accounting Matters: Do this audit work yourself and save yourself thousands of rands!

Minister of Finance, Pravin Gordhan, will deliver his Budget Speech on 22 February. As many SA companies have set their financial year-ends to coincide with this speech, I thought you’d find it useful to recap what adjustments and reversals you must perform at your financial year-end – before your auditors descend on you in a cloud of panic and deadlines!

Find out more here...

Tuesday - Before you do another thing, read this special report to see if you’re one of several companies making these five tax mistakes...

Do you...

·         Structure your salary to pay less tax?

·         Claim tax deductions on your expenses?

·         Rely on your accountant or tax consultant to do your taxes?

·         Charge Vat?

·         Pay tax provisionally?

Read more here...

Wednesday: Tax Matters: Do you really understand who’s paying what when the NEW Dividends Tax kicks in on 1 April 2012?

On 1 April 2012, the new Withholding Tax on Dividends (or Dividends Tax (DT) as it's called) replaces Secondary Tax on Companies (STC). For companies, shareholders and investors alike, the transition signals some big changes.

Know more here...

Thursday: Accidents in the workplace are causing FOUR deaths per minute

Did you know that each day around the world, on average, 5 000 people die because of work-related accidents or diseases?

Are these silent killers a risk for your company?

Read more here...

Until next week

Lenell Hattingh
Vat Product Manager

P.S. Please remember to fill in Lia’s survey!

This is just a reminder that if you answer a few quick survey questions, Lia will send you a FREE digital copy of the December issue of Tax Watch, which is valued at R99.
 
What you’ll find in the December issue:

·         Say goodbye to medical deductions on 1 March 2012

·         There are 3 ways SARS is sewing up Vat loopholes in 2012

·         2 major legislative changes that will affect every company in 2012.