25. SARS VAT Vendors Guide.pdf

The date of transfer from the supplier thereof to the

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the date of transfer from the supplier thereof to the recipient; the assets which are necessary for carrying on such enterprise are disposed of by the supplier to the recipient; and the supplier and the recipient agree in writing that the consideration for the supply of the enterprise is inclusive of tax at the zero rate. See VAT-REG-02-G01 – Guide for Completion of VAT Registration Application Forms – External Guide and Interpretation Note 57 for more details on the supply of an enterprise as a going concern. The following are some examples of cases which are not regarded as the disposal of an income-earning activity: The sale of a bakery business without the ovens. The sale and leaseback of a commercial building. The disposal of a business yet to commence. The disposal of a dormant business. The enterprise sold does not have to be profitable at the date of transfer but the enterprise activities must be able to continue after the sale of the enterprise. The inclusion of goodwill as an asset in the sale of the enterprise is generally indicative that a business is being sold as a going concern. 6.3.4 Services relating to intellectual property rights Services supplied in connection with intellectual property rights to be used outside the Republic are taxable supplies which are subject to VAT at the zero rate. Any ancillary services supplied together with these intellectual property rights may also be also zero-rated. Should the intellectual property rights be used in the Republic, all services supplied in connection with such intellectual property rights must be standard rated. 6.3.5 Payments made by public authorities and municipalities to welfare organisations In cases where a welfare organisation is subsidised by a public authority or municipality to enable it to carry on its welfare activities as listed in the Regulations, 59 the welfare organisation is deemed to supply services at the zero-rate to the public authority or municipality to the extent of the subsidy/grant. This excludes any payment for actual supplies made to the public authority or municipality, or payment for a specific supply made to a third person on behalf of that public authority or municipality. See 2.3.3 and Interpretation Note 39 for more information on welfare organisations. 59 Refers to the regulations issued under Government Notice 112 published in Government Gazette 27235 of 11 February 2005. 43
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VAT 404 – Guide for Vendors Chapter 6 6.3.6 Foreign donor funded project Donor funds received by an FDFP situated in the Republic from an international donor will be deemed to be a service supplied to the international donor. The supply of the said service is taxable at the rate of zero per cent. See 2.3.5 for more details on FDFPs.
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