Transfer duty or Vat?

Exemptions notwithstanding, the sale of property is subject either to transfer duty or to Vat. Section 9(15) of the Transfer Duty Act states that transfer duty is not payable if a transaction is taxable supply under the Value Added Tax Act. If the seller is not a Vat vendor then the transaction will be subject to transfer duty unless the property is an exempt supply. Vat and transfer duty cannot therefore be discussed in isolation.

The author quickly dispenses with transfer duty using a table, the current version of which we see below, before dealing in depth with Vat.

Property Value	Rates of tax
R0 - R140 000	0%
R140 001 - R320 000	5% on the value above R140 000
R320 001 and above	R9000 plus 8% on the value above R320 000

The discussion covers the following topics:

• The criteria used in determining whether or not a transaction is subject to Vat, governed by section 7(1)(a) of the VAT Act. Here the definitions in section 1 are looked at and the definition of an "enterprise" expanded upon.
  
• Who is liable to pay Vat - section 7(2) of the VAT Act?
  
• Prices deemed to include Vat - sections 64 and 65 of the VAT Act are relevant here.
  
• When Vat is triggered, and at what rate it is payable and the time of supply rules.
  
• Sales of going concerns and the application of section 11(1)(e) of the VAT Act and Vat Practice Note 14.
  
• Notional input Vat credits.