The answer to this query
is based on legislation as at 2014/03/18.
Q: A "Home
Owners Association” is generally defined as a property owners’ association
which represents a body of multiple owners in full title or freehold housing
schemes as opposed to sectional title schemes. The term "Home Owners
Association” is not defined in the VAT Act, but Interpretation note 64
dealing with the exemption of income derived by body corporates, share block
companies and association formed solely for purposes of managing the
collective interests common to owners of immovable property specifically
mentions that home owners associations and property owners associations are
included in the definition of "association” provided.
Please confirm that the
proposed amendment exempting a supply of services by a home owners
association to any of its members from VAT does not apply to "property owner
associations” where the members are all owners of commercial property.
any association of persons (other than a company registered or deemed to be
registered under the Companies Act, 2008 (Act No. 71 of 2008), any
co-operative, close corporation or trust, but including a non-profit company
as defined in section 1 of the Companies Act, 2008 (Act No. 71 of 2008))
where the Commissioner is satisfied that, subject to such conditions as he or
she may deem necessary, such association of persons—(A) has been formed
solely for purposes of managing the collective interests
of residential property use or ownership of all
its members, which includes expenditure applicable to the common immovable
property of such members and the collection of levies for which such members
are liable; and (B) is not permitted to distribute any of its funds to any
person other than a similar association of persons,’’; and - The exemption only applies in as far as the expenditure relates
to "…managing the collective interests of residential property…”
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.