GUIDELINES: ITS IMPACT ON SOUTH AFRICAS VAT 17-18 April / Tokyo, - - PowerPoint PPT Presentation

THE VAT/GST GUIDELINES: ITS IMPACT ON SOUTH AFRICA’S VAT

17-18 April / Tokyo, Japan

Scope

• Brief introduction to South Africa’s VAT system
• Development of the Guidelines
• Impact on South Africa
• Conclusion

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Introduction to SA’s VAT system

• Part of the new world VAT
• Limited exemptions and zero ratings
• Based on destination principle
• Imports taxed, exports zero rated
• No explicit but rather implicit place of taxation rules
• No specific distinction between B2B and B2C supplies

3

Development of the Guidelines

• SA’s involvement as a Partner country
• Importance of government and BIAC representation on

task teams

• Development of a comprehensive document
• Extremely necessary in modern world with complex

cross border transactions

4

Impact on South Africa

• Issue of neutrality is paramount
• Zero ratings achieve this in many instances
• But certain limited scenarios where neutrality not

achieved

• Starting to consider principle of neutrality and how best

to achieve it i.e. zero ratings, refunds or registration?

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Key considerations

• Guidelines - the impetus for a relook?
• Acknowledgment of SA in global VAT system
• Shift in policy?
• Ready to accept change?
• Loss in VAT revenue but bigger picture?

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Key considerations

• Possible double/non taxation if non alignment with

Guidelines

• Importance of development of DTAs

– SA’s taxation of electronic services is an example of potential double taxation with other jurisdictions – Shows importance of international alignment

• Require legislative amendments, approximate 1-2 year

implementation

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Conclusion

• Cannot and should not underestimate the importance of

the guidelines

• Impact on global VAT systems
• Its impact on SA’s future development of its VAT cannot

be ignored

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