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Grants from Setas
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2013/01/16 at 09:02:39 AM GMT
Posts: 3
Grants from Setas

The client is accredited training provider by MerSeta, Engineering companies are obliged to train their employees/learners through companies accredited with MerSeta.My client provide training on behalf of Engineering companies and is subject to audit by MerSeta.Once MerSeta is happy with the audit conducted on my client they release a grant to an Engineering company which they then releases it to my Client

Question

My client got a letter from SARS saying he owes Vat?I believe my client is supposed to be exempted for Vat because the nature of the funds/income is getting is mainly from MerSeta grants, if you agree which channel must I follow to be able to prove that my client should be exempted from VAT on the grants received from MerSeta

Thanks

Regards

Mphiri Phalane

0725171377

mphirip@gmail.com



2013/01/16 at 01:31:07 PM GMT
Posts: 1

SETA grants are no longer regarded as being inclusive of VAT at the standard rate. The law was amended to introduce a provision to zero rate the receipt of SETA grants with effect from 1 April 2005. It follows that vendors will no longer be allowed to deduct input tax on any SDL payments made from April 2005 onwards


2013/01/16 at 04:22:39 PM GMT
Posts: 56
Grants

Hi Mphiri

Assuming you are referring to grants received from public authorities as defined in the Vat Act  ,my suggestion is that you need to read the whole  SARS Interpretation  Note 39 carefully, paying particular regard to the following paragraphs : 5. , 6.4 ,  6.9 and 6.11.2.

I believe once you have done this ,you will be in good position to take the matter further with SARS.

Good Luck.



2015/03/10 at 01:28:14 PM GMT
Sorry if I am being a tad dense, but any income received by any organisation that does training (the corporation trains staff per contracts with various SETA), is exempt from VAT? Or is this the training done with the money received from SDL refunds?


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