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No tax on SA’s flying doctor – court

08 May 2015   (0 Comments)
Posted by: Author: Ilse de Lange
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Author: Ilse de Lange (The Citizen)

The SA Red Cross Air Mercy Service Trust was a welfare organisation and did not have to pay VAT on its services, the North Gauteng High Court in Pretoria has ruled.

The trust approached the court for relief after the SA Revenue Service (Sars) ruled two years ago it had to pay 14% VAT on the fixed monthly fee and hourly rates for each flight they received from provincial government.

The trust provides an aero-medical service throughout South Africa consisting of a flying doctor and rural health outreach service, an air ambulance and rescue service. It has been approved as a public benefit organisation in terms of section 30 of the Income Tax Act. The finance minister has listed rescue or care of persons in distress as welfare activities.

But Sars maintained the trust did not qualify for a zero VAT-rating as it did not supply goods or services to a public authority in terms of the VAT Act.

Judge Cynthia Pretorius said she did not agree with this interpretation. She said Sars admitted the services provided were those of a welfare organisation. "Section 11(2)(n) of the Act applies as the services rendered by the trust qualify for the zero rate of VAT.”

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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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