Vat Matters - The VAT117 Vat exports form to your rescue! Find out how to use it NOW...

Dear Reader,

This week our Vat experts have been super busy! The Helpdesk received a record number of tricky Vat queries and Peter Franck answered each one of them. We’ll look into one of these questions a bit later.

First, I have to share some very interesting news! Our Vat guru, Dee Bezuidenhout is busy researching the new Tax Administration Bill and all that she can say at this stage is WATCH OUT! There are new laws incorporated into this Bill, such as the Diamond Export Levy, Securities Transfer Tax Admin and the Mineral and Petroleum Resources Admin Bill - just to name a few.

Don’t fret! If you’re a Practical Tax or Vat Loose Leaf subscriber you’ll get the low-down on this Bill soon. Dee’s busy putting a plan together to bring you the most important information in an easy-to-use format. You won’t need to wade through the legalese to find out exactly what you have to do. We’ll keep you posted on this.

Not a tax or Vat subscriber yet and you don’t want to miss out on business critical information like the Tax Administration Bill? Simply click on tax or Vat  to activate your 14 day FREE trial now and become a subscriber to our Loose Leaf services.

Another great reason to be a subscriber...

Kallie van der Merwe explains the nuts and bolts of a very interesting court case: De L and Another v Commisioner for the South African Revenue Services (IT 12292, VAT 596) [2012] ZATC 3 (4 November 2010). De L got himself into hot water by submitting Vat returns and claiming refunds when he wasn’t supposed to! Vat subscribers can prepare themselves to get all the details of this court case in their next update.

This week’s hottest Vat Helpdesk query is all about saving on input tax by changing from the invoice basis to the payments basis.

Let’s look at the subscriber’s predicament and how Peter helped him.

Question

We have a client who is registered for Vat but due to the nature of his business he only receives payment a couple of months after he does his work.

Is it possible to change the Vat liability to a cash basis?

If so, how would we go about it?

Answer from the Helpdesk

A sole trader or partnership consisting of natural persons with an annual turnover of less than R2.5 million may apply to be registered for Vat on the payment basis (Section 15 of the Vat Act), or change to the payments basis (Download the VAT117 form).

However, if your client doesn’t meet this criterion, I suggest he closes his tax periods on the 25th of each month and issues tax invoices for that month on the 26th.

Tip:This simple and legal move can delay having to account for output tax by one or two extra months.

If you want more information on the payment basis, page to chapter A03 in your Practical Vat Loose Leaf now. In this chapter we cover:

·         The 2 bases explained A 03/002

·         Checklist: 8 vendor types that can use the payment basis A 03/002

·         Checklist: 6 types of vendors NOT allowed to use the payment basis and must use the invoice basis A 03/003

·         The payment basis may not apply A 03/006

·         If you change from one basis to another, you must do a Vat adjustment calculation! A 03/006

·         Tips to use to your advantage A 03/009

For more tax, Vat and accounting tips – see what kept the finance team busy this week...

Monday 30 January - Accounting Matters: IASB proposed standards could affect how YOU recognise your revenue

If this new standard is instituted, how will this affect you?

Currently, many companies offer “free stuff” as incentives to customers to boost sales. For example cellphone companies often offer two phones on a contract, for the price of one, to boost sales of that particular contract. Here, revenue would only be recognised over the term of the contract. Read more here...

Tuesday 31 January - Tax Matters: 8 new tax rules and deadlines you can’t miss in 2012

1.    Give SARS an IT14SD to clear your name

In November 2011, SARS introduced a new form that companies must complete. Called the IT14SD, it’s basically a declaration where you reconcile your information for PAYE, income tax, Vat and Customs. SARS uses it to check if there’s any mismatch in the information you supply to SARS.

To read rules 2-8 click here...

Wednesday 1 February - Tax Matters: Greece names and shames its billion-Euro tax dodgers. Will SARS do it too?

In an exclusive news report, I learned that Greece is taking a non-nonsense approach to long-time tax dodgers. It’s naming and shaming 4 000 of the country’s worst tax crooks!

Until next week

Lenell Hattingh
Vat Product Manager

P.S. Why your first instinct could be your first big mistake…

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An employee comes to work drunk and causes a disruption to your work day and the general mood of the office.

Your first instinct is to fire him, right? BIG MISTAKE!

If it’s proven that your employee is an alcoholic, you’re not allowed to fire him.
In South Africa alcohol and drug addiction is recognized as an illness and sick people are protected by law. In the Labour law for Managers Loose Leaf we give you a step by step system to dealing with this tricky situation and coming out the other side a winner.

Click here to find out how to master every tricky labour issue with ease! Never be stumped again with South Africa’s foremost legal experts at your beck and call. Find out more today!