South Africa: VAT Regulations on Domestic VAT Reverse Charge Treatment for Valuable Metals
South African Revenue Service released VAT domestic reverse charge regulations FAQs in Government Gazette 46512 , relating to supplies of valuable metals.
The Domestic Reverse Charge (DRC) Regulations were implemented as a mechanism to limit the exploitation of the VAT system as a tool to legitimize gold obtained illegally, and therefore to prevent the registration of a chain of fictional businesses to get VAT refunds.
The notice covers:
- The definition of using the Domestic Reverse Charge Regulations
- All affected suppliers and types of products covered by the DRC Regulations, namely:
- mines;
- manufacturing businesses;
- dealers in gold;
- dealers in second-hand goods (especially those who buy and sell jewelry);
- gold scrappers;
- manufacturing, wholesale, and retail jewelers;
- vendors who consume or use gold to manufacture articles containing gold, and;
- coin shops are examples of affected vendors.
- Standards that must be met for a supplier to be covered by the DRC
- The definition of a valuable meal
- A description of what falls under the category of supplementary products and services
- The removal of coal or carbon from the DRC Regulations
- The DRC’s effects on gold-dealing pawn shops
- Conditions for VAT chargeable on purchases made by non-vendors
- Qualifications for traders for value declaration stated in their VAT 201 returns
- Requirements to be met for recordkeeping
- DRC treatment for import products
The DRC Regulations took effect on July 1, 2022
Source: sars.gov.za
