SARS Interretation Note 31-Documentary proof required for the zero-rating of goods and services

SARS Government

SARS issued an Interpretation Note on 16th March 2016 setting out their requirements concerning documentary proof required for the zero-rating of goods and services. I suggest that you review its contents. For instance the requirements concerning the sale of an enterprise as a going concern are the following:

a) A copy of the contract of sale between the recipient and the vendor confirming in writing that

i) the enterprise or part thereof –

· is disposed of as a going concern; and

· will be an income-earning activity on the date of transfer thereof;

ii) the assets necessary for carrying on such enterprise or part thereof must be disposed of to the purchaser; and

iii) the consideration for the supply includes VAT at the zero rate;

b) Tax invoice; and

c) The recipient’s Notice of Registration.

I would suggest that a tax invoice reflecting the transaction at the zero-rate is always attached as an annexure to the sale agreement and the description of the seller and the purchaser both contain the VAT registration numbers in that description. I suggest that the appropriate warranties in relation to the correctness of the information also be included.


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