Must the VAT Notice of Registration show that a vendor is a farmer?
30 June 2015
Posted by: Author: SAIT Technical
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
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.