One of the unusual features of the vat Act lies in one of the ways in which it deals with auctioneers, who are agents as far as vat is concerned.Section 54(5) of the Act provides that when the principal and the auctioneer agree to have a supply by auction of any goods, other than a taxable supply, treated as if the supply were made by the auctioneer and not by the principal, the supply will be charged with tax as if it were made by the auctioneer in the course or furtherance of the auctioneer’s enterprise.
The auctioneer may then recover the amount of tax charged on the supply from the principal or retain or deduct the relevant amount out of any money in the auctioneer’s hands belonging or payable to the principal.
The auctioneer must maintain the records contemplated in s 20(8) as if the principal made a supply of second-hand goods to him or her, not being a taxable supply.This means, for example, when you arrange with an auctioneer to try to sell your goods by auction and they are not goods of your vat enterprise, you may agree with the auctioneer to treat the sale as a taxable supply for vat.
The auctioneer will then have to account for vat output tax on the sale of the goods, even though you would not have had to account for vat on the supply had you sold the goods without the intervention of the auctioneer.
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.