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Must the VAT Notice of Registration show that a vendor is a farmer?

30 June 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: We registered three farming companies for VAT during May 2014 and SARS issued  a Notice of VAT registration, but the notice do not state that the companies are registered as farmers in terms of paragraph 7 of the VAT act. I went to the SARS offices last year and explained that we need a VAT certificate for these companies that reflects the fact that they are farming entities in terms of paragraph 7 of the VAT Act, but a senior official there informed me that the new registration system at SARS do not show that paragraph on the notification and SARS is in process of correcting the matter.

 I then recently phoned SARS to determine what we should do and it was explained to me that I have to contact the head office of SARS at 012 422 2000.

Our client urgently needs these certificates so that his suppliers will not charge him VAT on his farming supplies and we do not know what to do to get it, because it seems like no one at SARS can help us with this.

A: You are referring to the certificate mentioned in paragraph 2 of the Part A of Schedule 2 (to the Value-Added Tax Act – specifically section 11(1)(g) the Zero Rate: Supply of Goods Used or Consumed for Agricultural, Pastoral or other Farming Purposes).  In terms of Interpretation note 31 the recipient must obtain a copy of the recipient’s VAT 103 form, authorising the recipient to acquire the goods contemplated in Part A of Schedule 2 at the zero rate.  A vendor must, on registration, still receive the VAT103. 

In the past it was accepted that the supplier was obliged to confirm with SARS under section 6(2)(d) whether the recipient is a registered vendor, as the supplier will not otherwise know whether the notice of registration is valid.  This section was deleted in 2011.  We are not sure if it is requirement that this must still be obtained from SARS, but it is not relevant to your request.   

The SARS head office number is 012 422 4000, but we suggest that SARS’s failure to assist the client may well be a service matter that could be referred to the Tax Ombud.

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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