Purchase price and Vat

In terms of the provisions of section 64 of the Value-Added Tax Act, No 89 of 1991, any price charged by any vendor in respect oaf any taxable supply of goods or services shall for the purposes of this Act be deemed to include any tax payable in terms of section 7(1)(a) in respect of such supply, whether or not the vendor has included tax in such price or not.

The purchase price in a contract is often stated as "including VAT" or "VAT (if any) will be added to the purchase price". If the deed of sale does not mention VAT, the price is for VAT purposes deemed to include the VAT charged under section 7(1)(a) of the Act.

Conveyancers are urged to draft their deeds of sale correctly and convey the correct information in the deed of transfer and supporting documents.

Republished with permission from SA Deeds Journal


Reader Comments:

RENE NORTJE 13/02/2020:

* If a developer is registered for Vat and he is currently selling erven and building packages in a development, is the transaction then seen as a Vat transaction, meaning Vat should be included in the selling price and building price and no transfer duty is then payable to SARS?

* Is payment of the Vat amount paid over to SARS from conveyancing attorney side or is it the responsibility of the developer to pay the VAT to SARS?

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