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South Africa: Guidance for VAT ruling applications

South Africa: Guidance for VAT ruling applications

Guidance concerning the request for value added tax (VAT) rulings has been provided by the South African Revenue Service (SARS).

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VAT rulings

Section 72 of the VAT law effectively provides that when a vendor (or class of vendors) experiences difficulties, anomalies or incongruities in applying any provisions of the VAT law as a result of the manner in which its enterprise is conducted, the SARS may issue a ruling to overcome such difficulties, anomalies or incongruities.

Following a review, section 72 was amended (effective 1 July 2019). In March 2020, SARS noted that the reason for the amendment included factors to:

  • Limit the Commissioner’s discretion in making a decision under section 72
  • Clarify the circumstances for which section 72 can be used
  • Align the wording of section 72 with the policy intent of the VAT law as a whole, as well as the intention behind any specific provisions in the law that might be applicable

All existing rulings issued prior to 21 July 2019—and that cease to be effective between 21 July 2019 and 31 December 2021—are subject to transitional rules introduced by SARS but can, in certain instances, be reconfirmed. However, all rulings and reconfirmed rulings will expire no later than 31 December 2021.

Those vendors applying for a new ruling under Section 72 after 21 July 2019 must submit the application in the form and manner provided for in the SARS VAT guide (published by 9 April 2020) and must include the following:

  • A clear description of the difficulties, anomalies or incongruities that have arisen or that may arise when applying the VAT law. For example, a request will not be accepted if it is intended to merely be an arrangement to resolve a past non-compliance with the VAT law, or to address issues that arise in the business because of a lack of capacity.
  • An indication of how the difficulties, anomalies or incongruities that have arisen or that may arise, and will apply equally to other vendors or a class of vendors that may face the same or similar business circumstances.
  • A specific listing of relevant provisions in the VAT law that causes the difficulties, anomalies or incongruities and the effect that is created when applying that law.
  • An explanation to support the view that the ruling (if granted) will not reduce or increase the vendor’s liability for VAT.
  • An explanation to show that the ruling (if granted) will not be contrary to the intention of a specific provision of the VAT law or the policy construct of the VAT Act as whole.”


Read an August 2020 report [PDF 72 KB] prepared by the KPMG member firm in South Africa

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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