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

Part VIII - Special Provisions

VAT: 50A. Separate persons carrying on same enterprise under certain circumstances deemed to be single person

 

(1) Notwithstanding the provisions of section 23, if the Commissioner makes a decision under this section, the persons named in the decision shall be deemed to be a single person carrying on the activities of an enterprise described in the decision and that person shall be liable to be registered in terms of section 23 with effect from the date of the decision or, if the decision so provides, from such date as may be specified therein.

 

(2) The Commissioner shall not make a decision under this section naming any person unless he or she is satisfied—
(a) that such person is making or has made taxable supplies; and
(b) that the activities in the course of which he or she makes or made those taxable supplies form only part of certain activities which should properly be regarded as those of the enterprise described in the decision, the other activities of that enterprise being carried on at that time or previously by one or more other persons; and
(c) that, if all the taxable supplies of that enterprise were taken into account, a person carrying on that enterprise should at that time be liable to be registered in terms of subsection (1); and
(d) that the main reason or one of the main reasons for the person concerned carrying on the activities first referred to in subparagraph (b) in the way he does is the avoidance of a liability to be so registered (whether that liability would be his, another person's or that of two or more persons jointly).

 

(3) A decision made under this section shall be served on each of the persons named in it.

 

(4) Where, after a decision has been given under this section specifying a description of the enterprise, it appears to the Commissioner that a person who was not named in that decision is making taxable supplies in the course or furtherance of activities which should properly be regarded as part of the activities of that enterprise, the Commissioner may make and serve on him or her a supplementary decision referring to the earlier decision and the description of the enterprise specified in it and adding that person's name to those of the persons named in the earlier decision with effect from—
(a) the date on which he began to make those taxable supplies; or
(b) if it was later, the date with effect from which the single person referred to in the earlier direction became liable to be registered in terms of this section.

 

(5) If, immediately before a decision (including a supplementary decision) is made under this section, any person named in the decision is registered in respect of the taxable supplies made by him or her as contemplated in subsection (2) or (4), he or she shall cease to be liable to be so registered with effect from—
(a) the date with effect from which the single person concerned became liable to be registered; or
(b) the date of the decision,

whichever date is the later.

 

(6) In relation to an enterprise specified in a decision (including a supplementary decision) under this section, the persons named in such decision, who together are deemed to be the liable person, are in subsections (7) and (8) referred to as the members.

 

(7) For the purposes of this Act, where a decision is made under this section—
(a) the person carrying on the enterprise specified in the decision shall be registrable in such name as the members may jointly nominate upon compliance with the provisions of section 23(2);
(b) any supply of goods or services by or to one of the members in the course of the activities of such single person shall be deemed to be a supply by or to such single person;
(c) each of the members shall be jointly and severally liable for any tax due by such single person;
(d) notwithstanding the provisions of paragraph (c), any failure by such single person to comply with any requirement imposed upon him by or under this Act shall be deemed to be a failure by each of the members severally; and
(e) subject to paragraphs (a) to (d) of this subsection, the members shall be deemed to be a body of persons carrying on the enterprise of such single person and any question as to the scope of the activities of that enterprise at any time shall be determined accordingly.

 

(8) If the Commissioner is of the opinion that any person who is one of the members should no longer be regarded as such for the purposes of subsection (7)(c) and (d) and the Commissioner gives notice to that effect, that person shall no longer be liable in terms of that subsection for anything done after the date specified in that notice and shall be deemed to have ceased to be a member of the body of persons referred to in subsection (7)(e).