Summary
Summary - Taxation of business activities and Individuals (Tax3761)
- Institution
- University Of South Africa (Unisa)
Breakdown of the statements linked to business activities with all schedules and legislation . With
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TAX3701 PRE-EXAM QUICK NOTES:1. VAT – 14% if amounts exclude VAT; 14/114 if amounts include VAT
a. Compulsory registration: total value of taxable supplies for the
preceding 12 months exceed R1 million
b. Voluntary registration: total taxable supplies for the preceding 12
months exceed R50 000
Output VAT: levied on services rendered by
the taxpayer (on invoice amount, not the
amount received)
Goods supplied or services rendered x 14% XXX
Exempt supplies: nil
• Financial services
• Donated goods
• Residential accommodation
• Commercial property if owned for
less than 28 days (if more than 60
days taxpayer must pay VAT on 60%
of the whole charge, vendor can
claim full input VAT)
• Hire and letting accommodation
• Sale or letting of land outside SA
• Services of body corp when paid for
by levies
• Transporting of fare paying
passengers and their personal items
in taxi or bus
• Educational services by state school
or varsity that is a PBO
• Varsity, school, technikon, or college
fees
• Childcare services by crèche or
aftercare
Fringe benefit: use of MV
Cost (excl VAT) XXX
Consideration: if it is a motor vehicle
as defined, multiply by 0.3%; if it is
not, multiply by 0.6% XXX
(Less) Deductions (XXX)
Multiply by tax fraction (14/114) XXX
Multiply by the percentage of taxable
usage XXX XXX
If it is a motor car as defined, input tax is
denied, if not the employer can claim VAT
paid on the vehicle as an input tax credit
(XXX)
Zero-rated items: XXX x 0%
• Export of moveable goods overseas
, or goods delivered to foreign ship or
plane if for use on ship or plane
• Transport overseas
• Services rendered outside of SA
• Sale of going concern
• Sale of parts of enterprise if can
operate separately and only for going
concern part (must be more than
50% for the purpose of the going
concern)
• Small retailers VAT package
• Goods and services for farming or
agriculture
• Gold coins or Kruger Rands by
Reserve Bank
• Basic foodstuffs – nothing canned
• Fuel/illuminating paraffin
• Goods supplied to Industrial
Development Zone
• Services for intellectual property
rights outside SA
• Municipal rates
• Goods supplied to foreign country
but delivered in SA to registered
vendor and used to make taxable
supplies
Deemed supplies: VAT at 14%
• Ceasing to be a vendor (VAT must be
paid at lesser of market or cost of
assets)
• Indemnity payments
• Supplies to independent branches in
the Republic
• Fringe benefits to employees:
o Assets given to employees at
free or low cost
o Right of use of asset
o Services to employee for
private purposes
o Release of employee from
debt
(Input tax: claimable on amounts paid)
Input VAT denied on: nil
• Entertainment
• Club membership fees or
subscriptions
• Motor cars
Imports:
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