Q: I have a client that is interested in registering for turnover tax. My
client works as a graphic designer; would his services be considered
professional services for turnover tax purposes?
A: The interpretation of this definition is
problematic as is the similar provision in s12E of the Income Tax Act which
refers to personal service with the same exclusions. This is a government
policy exclusion of "professional” rather than layman’s trades (e.g.
hairdressing, fitter & turner etcetera) and in Interpretation Note 9 (issue
5) on section 12E it states that each of these entries must be construed in its
widest meaning which is supported by the use of the word "field” to describe
this wide meaning. So any trade that would fit within the field of the listed
trades will be excluded. For example tax practitioner is not listed but is does
fall within the fields of law, accounting and consulting and would therefore be
excluded. In our view graphic designer would fall under the fields of either
architecture or consulting.
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.
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.