Q: I have a client who does charter flights to disaster areas on behalf of the
SA government, therefore he invoices the government. He charters the plane from an international
company and pays them in dollars, and they do not charge him any VAT. Now he
has been told by the charter company that he does not need to charge the government
VAT as it is international flights. I do
not agree as the client resides is SA and the services originates in SA. Please
can you confirm this for me?
A: With regards to the query you did not state that the disaster areas are in an export country
(i.e. outside SA) but we have assumed so. The transport of passengers by air to
or from a place in South Africa to an export country is a taxable supply
subject to VAT at the zero rate in terms of section 11(2)(a) VAT Act. It
therefore does not matter that the flights originate or end in SA. However even
the transport of passengers by air from a place in SA to another place in SA
will be subject to VAT at the zero rate if it constitutes "international
carriage" as defined in article 1 of the Convention set out in the
Carriage by Air Act 17 of 1946 (section 11(2)(b) VAT Act).
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.
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