25. SARS VAT Vendors Guide.pdf

139 vat 404 guide for vendors chapter 16 a vendor and

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VAT 404 – Guide for Vendors Chapter 16 a vendor and the scope of the audit will be communicated in the first notification received from the auditor. What happens during the auditing process? The TA Act provides that a vendor must be kept informed of the progress of an audit at regular intervals. The Commissioner has issued a Public Notice 788 179 prescribing when reports need to be issued. At the conclusion of the audit, a notice is required to be issued explaining any proposed material adjustments to be made and the vendor has the right to respond to the notice within 21 business days. The time periods may be extended by consent and SARS may deviate from the process if strict compliance may impede the progress or outcome of an audit. How are vendors selected for audits? Chapter 5 of the TA Act provides the basis upon which a person may be selected for an inspection or verification which can be any consideration relevant for the proper administration of a tax Act, including a random or risk assessment basis. This is not the basis for criminal investigations which are triggered by indications of an offence under the tax Acts. The TA Act also prescribes procedures that SARS has to follow both during and after an audit. For more detailed information, see the Short Guide to the Tax Administration Act, 2011 . 179 Government Gazette 35733 dated 1 October 2012. 140
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VAT 404 – Guide for Vendors Glossary Glossary Association not for gain An “association not for gain” is essentially a religious institution or other society, association or organisation (including an educational institution of a public character) which is not carried on for profit and is required to use any property or income solely in the furtherance of its aims and objects. An association not for gain could also qualify as a “welfare organisation” if it conducts certain activities. The VAT 414 – Guide for Associations not for Gain and Welfare Organisations deals specifically with associations not for gain and welfare organisations. Commercial accommodation There are three types of commercial accommodation, namely: Lodging or board and lodging together with domestic goods and services in any house, flat, apartment, room, hotel, motel, inn, guesthouse residential establishment, holiday accommodation unit, chalet, tent, caravan, campsite, houseboat or similar establishment. This must be supplied regularly and systematically, excluding a “dwelling” supplied for letting or hiring thereof [as this is an exempt supply under section 12(c)]. Lodging or board and lodging in a home for the aged, children, physically or mentally handicapped persons. Lodging or board and lodging in a hospice. Connected person The term includes but is not limited to: family relatives, partnerships, trust beneficiaries, branches of the same legal entity, companies with substantially the same shareholders etc. This term describes and identifies the relationships between different persons. The term is
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