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VAT _Pt 2 - Coggle Diagram

- - - - Based on section 10(2) of the VAT Act
- - - - If someone rents out a house, flat or apartment to someone as their place of residence under a lease agreement, they do not have to charge VAT on the rent
        
        Because Residential accomodation in a dwelling is exempt from VAT
      - However if someone rents out a room, house, flat, or other type of accommodation to someone for commercial purposes such as hotel, motel, guest house or any other establishment, they are requied to charge VAT
        
        This is because commercial accommodation is subject to VAT
  - - - residentual establishment
        
        similar establishment that is regularly or systematically supplied
    - - holiday accommodation unit
    - - flat
        
        houseboat
    - - chalet
    - - tent
    - - boarding house
        
        camping site
    - - caravan
    - - together with domestic goods and services
  - - - This means that only 60% of the total charge will be subject to VAT
- - - - Despite the 0% Rate, input tax can still be claimed
      - Different from someone making exempt supplies, which VAT Input cannot be claimed
  - - - :star:Insuring or arranging insurance for international trips
      - :star:Certain services related to the repair or maintenance of foreign-going ships or aircrafts
      - :star:Transport of passengers or goods between places outside of South Africa
      - :star:Certain services related to intellectual property for use outside of South Africa
      - :star:Services rendered outside South Africa
      - :star:Services rendered to a non-resident who is not a vendor
      - :star:Supplies to independent branches outside SA
- - - - If a transport business provides the service of transporting paying passengers and their belongings by road or railway, and the business operates the transport themselves, then that service is exempt from VAT.
        
        However, this exemption only applies if the transport service is provided as part of the business's usual activities and not as a one-time occurrence.
    - - The supply of residential accommodation in a dwelling, as well as the supply of a "right of occupation" to certain retired persons and the supply of lodging or board and lodging as a fringe benefit or hostel for employees
    - - Education services are exempt from Value-Added Tax (VAT) in South Africa, provided they meet certain requirements
        
        or tax-exempt Public Benefit Organizations (PBOs) offering adult basic education and training
        
        vocational or technical education
        
        Including being supplied by registered schools or colleges, public or private higher education institutions.
        
        Or education and training for religious or social workers or persons with physical or mental impairments.
    - - non-resident supplies the goods from outside South Africa, and the goods are imported into South Africa by the South African resident
        
        the South African resident would be responsible for paying VAT on the importation of those goods
      - In this case, the non-resident would not have to pay VAT on the sale of the goods to the South African resident.
    - - housing developments for seniors
      - Home Owners Associations (HOAs).
      - managing properties like apartment buildings
      - Basically, the exemption means that property managers do not have to charge their clients VAT for these types of services
    - - Members pay for these things themselves through their membership fees.
    - - VAT is not charged on dividends received as they are not payment for any supply.
      - Financial service suppliers cannot register as VAT vendors, and VAT inputs must be apportioned between taxable and exempt supplies.
      - Examples of VAT-exempt financial services include currency exchange, payment or transfer of ownership of cheques, debts cession, interest charging and provision of credit, life insurance policies and subscriptions, pension fund contributions, and cryptocurrency exchange.
        
        However Fees paid for arranging or consulting on financial services are not exempt from VAT.
      - A tax court case held that a company administering funeral policies had to charge VAT on the share of the premium received for its services.