Q: A client of ours, who is VAT registered, is selling his farm which is
currently income generating to the Department of Human Settlements. What is the
A: The supply of immoveable property used in an enterprise to make taxable
supplies by a VAT vendor will result in a taxable supply for the purposes of section
7(1) of the VAT Act unless a specific exemption or zero rating applies. In our
view the sale of the farm will only be zero rated if sold as a going concern in
terms of section 11(1)(r) of the VAT Act if the relevant Department is a
registered VAT vendor.
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.