On 23 February 2022, Finance Minister Enoch Godongwana presented the annual budget proposal for the 2022 financial year to the National Assembly.
Amongst other proposals, available on the National Treasury website, the following Value-Added Tax (“VAT”) proposals were presented.
VAT IT SA summarizes the possible business impact for the VAT proposals below.
VAT
Reviewing section 72 arrangements and decisions
Amendments to section 72 of the VAT Act resulted in difficulties for taxpayers who historically relied on such rulings prior to 21 July 2019. Some of these rulings will have to be reconsidered and/or incorporated into current VAT legislation.
The Finance Minister announced that section 72 rulings will be further reviewed to determine whether any other legislative amendments would be required.
Taxpayers who historically relied on section 72 rulings, should engage with SARS to ensure that its specific transactions are included in the said review.
VATIT can assist taxpayers to review its transactions and to engage with SARS in this regard.
Updating the regulations prescribing electronic services
The current regulations pertaining to VAT on electronic services will be reviewed by SARS to align these Regulations with the Organization for Economic Cooperation and Development (“OECD”).
Our specialist global team can advise on any territory where electronic services are supplied and analyze whether a VAT liability exist.
Article by:
Deon le Roux
Senior VAT Manager
VAT IT SA