The distinction between types of commercial and residential property for value-added tax purposes in South Africa
- Authors: Ferreira, Melanie
- Date: 2012
- Subjects: Property tax -- South Africa , Value-added tax -- South Africa , Tax assessment -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:8955 , http://hdl.handle.net/10948/d1008710 , Property tax -- South Africa , Value-added tax -- South Africa , Tax assessment -- South Africa
- Description: It is important to distinguish between types of commercial and residential property for value-added tax (VAT) purposes. The reason for this is because the supply of residential property may be exempt from VAT in certain cases, whereas the supply of commercial property is a taxable supply. One of the aims of this treatise was to generate some characteristics that can assist vendors to distinguish between types of commercial and residential property for VAT purposes. SARS proposed numerous changes to the VAT Act with regards to fixed property in 2011. This treatise explains the reason for the changes made and also comments on them. Firstly, property developers previously had to account for an output tax adjustment when they changed the use of their property i.e. from a taxable use (selling the completed units) to a non-taxable use (renting the completed units as a residential dwelling). This „output tax adjustment‟ sometimes places developers in a financial dilemma, especially in times of an economic depression. SARS therefore provided „developers‟ as defined with a short term solution. This short term solution provides property developers with a 36 month temporarily relief period, before they have to account for the „output tax adjustment‟. Therefore, the new section 18B was proposed to assist property developers in times of an economic recession. Secondly, in the past a vendor who acquired a property from a non-vendor to make taxable supplies was allowed a notional input tax deduction, limited to the transfer duty paid. SARS has however "delinked VAT from transfer duty‟, which means that the notional input tax deduction will no longer be limited to the transfer duty paid. This change may benefit vendors as they may now be allowed a bigger input tax deduction. Furthermore, the treatise also compares the VAT treatment of the above issues to that of the goods and services tax treatment in New Zealand. The treatise concludes with a summary of all distinguishing characteristics identified and other findings noted.
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- Date Issued: 2012
A common law view of "carrying on a trade"
- Authors: Mkonza, Qhinga Aidan
- Date: 2018
- Subjects: Business , Common law -- South Africa , Income tax -- South Africa , Agriculture -- Taxation -- South Africa , Property tax -- South Africa , Moneylenders -- Taxation -- South Africa
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/60888 , vital:27883
- Description: The term “trade” is defined in very wide terms in the Income Tax Act and includes a “business” and a “venture”. For a taxpayer to claim certain deductions in arriving at taxable income, the taxpayer must be carrying on a trade. The expression “carrying on a trade” is not defined in the Income Tax Act. Whether or not a taxpayer is carrying on a trade is a matter of fact. Case law has established certain principles and tests to be applied in determining whether a taxpayer is carrying on a trade. The goal of the thesis was to determine to what extent an activity can be considered as carrying on a trade. This research focused on the letting of property, money-lending, or farming operations in relation to carrying on a trade or business or engaging in a venture. The thesis also discussed at what stage a taxpayer ceases to carry on a trade and what the tax consequences are of ceasing to trade. An interpretative research approach was used in the research as it sought to understand and describe. No interviews conducted for this research and the data used for the research are publicly available. It was established that “carrying on a trade”, including a business, requires an active step taken by the taxpayer to trade. It involves regularity of buying and selling or rendering of services. The intention to trade is important but it is a subjective matter and cannot be persuasive in determining whether a taxpayer is carrying on a trade; objective factors are also considered. If the stated intention to trade matches the actions of the taxpayer, the taxpayer will be considered to be carrying on a trade. In determining whether a taxpayer is carrying on a trade each case must be considered with its own merits.
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- Date Issued: 2018