Secondments of employees by companies between entities within corporate groups (including multinationals) may have unexpected value added tax (VAT) implications.
When salaries of seconded employees are recovered from the entities to which they were seconded, the following must be considered:
The VAT implications resulting from secondments are not directed by “who pays the salary” but rather by the contractual relationships between the employer(s) and employee(s). In considering secondment contracts or agreements and the effects from a VAT perspective, an entity could be exposed to VAT, penalties, and interest when:
Read a January 2021 report [PDF 84 KB] prepared by the KPMG member firm in South Africa
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