South Africa: Updated VAT guide issued for vendors

The South African Revenue Service (SARS) released an updated VAT 404 – Guide for Vendors on December 17, replacing all previous editions. The guide introduces several updates and clarifications for VAT-registered vendors, with key topics outlined below:

• Amended definitions: Updates to definitions of various terms relevant to VAT compliance and operations.
• Registration of foreign entities: The guide introduces a new provision aimed at simplifying administrative processes for foreign entities obligated to register for VAT in South Africa.
• Telecommunications providers: VAT-registered telecommunications providers can now issue credit notes if the nature of the supply changes after a prepaid voucher has been issued.
• Out-of-scope supplies: Goods and services not explicitly exempted by law are considered “out-of-scope supplies.” Vendors cannot claim input tax deductions for VAT incurred in relation to these supplies.
• Temporary residential letting by developers: Developers who temporarily let dwelling units for residential use while maintaining their intention to sell the units as taxable supplies must adhere to newly introduced provisions for such activities.

All previous editions of the VAT 404 guide are withdrawn as of December 17, ensuring that the updated version serves as the sole authoritative reference for vendors.

Source: sars.gov.za

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