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Does a private nursery school or after-school centre charge VAT on its fees?

03 April 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

The answer to this query is based on legislation as at 2014/04/03.

Q: I have 2 clients, one is a nursery school and 1 an afterschool care centre. Both of them had to register for VAT as their turnover exceed R 1 000 000. I have tried to find out if they have to charge VAT on their fees. SARS employees can not provide an answer as I get different answers from different people. 

Does a privately owned nursery school and afterschool centre that is a vat registered enterprise charge vat on their fees?  

A: Sec 12(j) of the Value-Added Tax Act (hereinafter referred to as ‘the VAT Act’), provides for the exemption of the following: ‘...the service of caring for children by a creché or an after-school care centre...’ 

Neither the word ‘crèche’, nor ‘after-school care centre’ are defined in the VAT Act. One would therefore have to revert to a dictionary to ascribe a meaning thereto. A ‘crèche’ is defined in The Concise Oxford Dictionary to mean ‘a day nursery for babies and young children’. The concept of ‘after-school care centre’ is not defined and therefore takes its ordinary meaning. 


Neither the crèche, nor the after-school care centre would have to levy output tax in terms of sec 7(1)(a) of the VAT Act on their fees due to their activities being exempt in terms of sec 12(j) of the VAT Act.


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.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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