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Value-Added Tax Act, 1991 (Act No. 89 of 1991)

Part IV - Returns, Payments and Assessments

27. Tax period

 

(1) For the purposes of this section—

"Category A" means the category of vendors whose tax periods are periods of two months ending on the last day of the months of January, March, May, July, September and November of the calendar year;

"Category B" means the category of vendors whose tax periods are periods of two months ending on the last day of the months of February, April, June, August, October and December of the calendar year;

"Category C" means the category of vendors whose: tax periods are periods of one month ending on the last day of each of the 12 months of the calendar year,

"Category D" means the category of vendors whose tax periods are periods of six months ending on the last day of February and August of the calendar year or, where any vendor falling within this category makes written application therefor, on the last day of such other months as the Commissioner may approve.

"Category E" means the category of vendors whose tax periods are periods of twelve months ending on the last day of their 'year of assessment' as defined in section 1 of the Income Tax Act or where any vendor falling within this category makes written application therefor, on the last day of such other month as the Commissioner may approve.

"Category F" means the category of vendors whose tax periods are periods of four months ending on the last day of June, October and February of the calendar year.

 

(2)
(a) Every vendor, not being a vendor who fails within Category C, D, E or F as contemplated in subsection (3), (4), (4A) or (4B), shall fall within Category A or Category B.
(b) The Commissioner shall determine whether such vendor falls within Category A or Category B and notify the vendor accordingly.
(c) The determinations made by the Commissioner under paragraph (b) shall be made so as to ensure that approximately equal numbers of vendors fall within category A and Category B.
(d) The Commissioner may from time to time direct that any vendor falling within Category A shall, with effect from the commencement of a future period, fall within Category B, or vice versa.

 

(3) A vendor shall fall within Category C if—
(a) the total value of the taxable supplies of the vendor (including the taxable supplies of any branches, divisions or separate enterprises of the vendor registered as separate vendors under section 50(2))—
(i) has in the period of 12 months ending on the last day of any month of the calendar year exceeded R30 million; or
(ii) is likely to exceed that amount in the period of 12 months beginning on the first day of any such month; or
(b) the vendor has applied in writing for the tax periods in his case to be on a monthly basis; or
(c) the vendor has repeatedly made default in performing any of his obligations in terms of this Act,

and the Commissioner has directed that, with effect from the commencement date or such later date as may be appropriate, the vendor shall fall within Category C: Provided that a vendor falling within Category C shall cease to fall within that Category with effect from the commencement of a future period notified by the Commissioner, if the vendor has applied in writing to be placed within Category A, B, D, E or F and the Commissioner is satisfied that by reason of a change in the vendor's circumstances he satisfies the requirements of this section for placing within Category A, B, D, E or F.

 

(4) A vendor shall fall within Category D if—

(a)        

(i) the vendor's enterprise consists solely of agricultural, pastoral or other farming activities or the vendor is a branch, division or separate enterprise which is deemed by subsection (5) of section 23 to be a separate person for the purposes of that section and is as such registered under that section or the vendor is a branch, division or separate enterprise registered as a separate vendor under section 50(2);
(ii) the activities of any such branch, division or separate enterprise consist solely of agricultural, pastoral or other farming activities and activities of that kind are not carried on in any other branch, division or separate enterprise of the vendor or the association not for gain, as the case may be, by whom a written application referred to in subparagraph (v) is made;
(iii) the total value of the taxable supplies of the vendor from agricultural, pastoral or other farming activities—
(aa) has in the period of 12 months ending on the last day of any month of the calendar year not exceeded R1,25 million; and
(bb) is not likely to exceed that amount in the period of 12 months commencing at the end of the period referred to in item (aa);
(iv) the vendor does not fall within Category C; and
(v) vendor whose enterprise consists solely of agricultural, pastoral or other farming activities or the vendor referred to in section 50(2) or the association not for gain referred to in section 23(5), as the case may be, has made a written application to the Commissioner, in such form as the Commissioner may prescribe, for such first-mentioned vendor or the branch, division or separate enterprise in question, as the case may be, to be placed within Category D; or
(b) the vendor is a micro business that is registered in terms of the Sixth Schedule to the Income Tax Act and has made written application in such form as the Commissioner may prescribe, to be placed in Category D,

and the Commissioner has directed that, with effect from the commencement date or such later date as may be appropriate, the vendor shall fall within Category D: Provided that a vendor falling within Category D shall cease to fall within that Category with effect from the commencement of a future period notified by the Commissioner, if written application is made by the person who made the application referred to in subparagraph (v) for the vendor to be placed within Category A, B, C, E or F or the Commissioner is satisfied that by reason of a change in circumstances that vendor should be placed within Category A, B, C, E or F.

[Subsection (4) amended by section 30 of the Tax Administration Laws Amendment Act, 2012 (Act No. 21 of 2012)

 

(4A) A vendor shall fall within Category E if—
(a) the vendor is a company or a trust fund;
(b) the vendor's enterprise consists solely of one or more of the activities of—
(i) letting of fixed property or the renting of movable goods to; or
(ii) the administration or management of,

companies which are connected persons in relation to the vendor;

(c) the recipients of those supplies are all registered vendors and are entitled to deductions of the full amount of tax in respect of those supplies;
(d) tax invoices are issued once a year and payments of consideration for these supplies, by agreement between the parties, only become due once a year at the end of the "year of assessment" as defined in section 1 of the Income Tax Act of the vendor making the supplies; and
(e) the vendor has made written application to the Commissioner in such form as the Commissioner may prescribe, to be placed in Category E,

and the Commissioner has directed that, with effect from a date which he considers appropriate, the vendor shall fall within Category E: Provided that a vendor falling within Category E shall cease to fall within that Category with effect from a date notified by the Commissioner if—

(i) written application is made by the person who made the application referred to in paragraph (e) for the vendor to be placed in a different Category; or
(ii) the Commissioner is satisfied that by reason of a change in circumstances, that vendor should be placed in Category A, B, C, D or F; or
(iii) the vendor's placing in Category E results in any financial loss (including any loss of interest) to the State.

 

(4B) A vendor (other than a vendor registered under section 50), shall fall within Category F if—
(a) the total value of the taxable supplies of the vendor—
(i) has in the period of 12 months ending on the last day of any month not exceeded R1,2 million; and
(ii) is not likely to exceed that amount in the period of 12 months commencing at the end of the period referred to in subparagraph (i); and
(b) the vendor has made written application to the Commissioner in such form as the Commissioner may prescribe, to be placed in Category F:

Provided that a vendor falling within Category F shall cease to fall within that Category with effect from a date notified by the Commissioner if—

(i) written application is made by the vendor to be placed in a different Category;
(ii) the Commissioner is satisfied that by reason of a change in circumstances that vendor should be placed within Category A, B, C, D or E; or
(iii) the vendor has repeatedly made default in performing any of his obligations in terms of this Act.

 

(5) For the purposes of subsection (3)(a) and subsection (4)(a)(iii)—
(a) the provisions of this Act relating to the determination of the value of any supply of goods or services, whether such supply is made before or on or after the commencement date, shall apply for the purposes of this paragraph, but no regard shall be had to any tax charged in respect of such supply, and
(b) the total value of the taxable supplies of a vendor within any period of 12 months referred to in subsection (3)(a) or (4)(a)(iii) shall not be deemed to have exceeded or be likely to exceed the amount referred to in subsection (3)(a) or the amount referred to in subsection (4)(a)(iii), as the case may be, where that total value exceeds or is likely to exceed that amount, as the case may be, solely as a consequence of—
(i) any cessation of, or any substantial or permanent reduction in the size or scale of, any enterprise carried on by the vendor, or
(ii) the replacement of any plant or other capital asset used in any enterprise carried on by the vendor, or
(iii) abnormal circumstances of a temporary nature.

 

(6) The tax periods applicable under this Act to any vendor shall be the tax periods applicable to the Category within which the vendor falls as contemplated in this section: Provided that—
(i) the first such period shall commence on the commencement date or, where any person becomes a vendor on a later date, such later date;
(ii) any tax period ending on the last day of a month, as applicable in respect of the relevant Category, may, instead of ending on such last day, end on a fixed day approved by the Commissioner, which day shall fall within 10 days before or after such last day: Provided that the future tax period so approved by the Commissioner must be used by the vendor for a minimum period of 12 months commencing from the tax period the change is made;
(iii) the first day of any tax period of the vendor subsequent to the vendor's first tax period shall be the first day following—
(a) the last day of the vendor's preceding tax period; or
(b) the fixed day as approved by the Commissioner in terms of paragraph (ii).