Does a private nursery school or after-school centre charge VAT on its fees?
03 April 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
The answer to this query is based on legislation as at 2014/04/03.
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.
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.