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37Section 50(1). 17
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VAT 404 – Guide for Vendors Chapter 2Example 3 – Separate registrations and the liability to register Facts: Mrs N is a sole proprietor and trades under the following three trading names: N’s Curry DenG’s Florists B’s Shoe RetailersTurnover of R510 000 Turnover of R390 000 Turnover of R220 000 Result: The combined turnover of the three businesses is R1 120 000. Since the type of supplies being made are not exempt (see Chapter 7for examples of exempt supplies), they will constitute “taxable supplies”. The “person” carrying on all three businesses is Mrs N, a sole proprietor. Therefore, the combined turnover of all the three business is considered in determining whether Mrs N is liable to register. Since she is liable for VAT registration, that is the combined turnover exceeds R1 million, she is referred to as a “vendor”and must account for VAT at 14% on all the sales in each business from the date of registration as a vendor. Mrs N will only be issued with one VAT registration number, but she can apply for three separate VAT numbers if she meets the conditions for separate registration. If SARS agrees to allocate separate VAT registration numbers, each separate business is deemed to be a separate person and VAT must be charged on supplies between the separate businesses, as well as to any other person. 2.7.2 Association not for gain An association not for gain which carries on its enterprise in branches or divisions, or carries on separate enterprises, may apply in writing for any of those branches, divisions or enterprises to be regarded as separate persons, and to register separately for VAT.38Application for the registration of separate activities must be made in writing to SARS, and will only be allowed where the separate branch, division or enterprise – •maintains an independent accounting system; and •can be separately identified by the nature of its activities or its geographic location. The practical implication is that an association not for gain can separately apply the compulsory and voluntary registration thresholds to each of its branches, divisions or enterprises in order to determine which of them must, or could be registered. The association not for gain could therefore end up registering and accounting for VAT only in respect of certain specific taxable activities, instead of all activities. 38Section 23(5).18