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Grants from Setas
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2013/01/16 at 9:02:39 AM GMT
Posts: 3
Grants from Setas

The client is accredited training provider by MerSeta, Engineering companies are obliged to train their employees/learners through companies accredited with MerSeta.My client provide training on behalf of Engineering companies and is subject to audit by MerSeta.Once MerSeta is happy with the audit conducted on my client they release a grant to an Engineering company which they then releases it to my Client


My client got a letter from SARS saying he owes Vat?I believe my client is supposed to be exempted for Vat because the nature of the funds/income is getting is mainly from MerSeta grants, if you agree which channel must I follow to be able to prove that my client should be exempted from VAT on the grants received from MerSeta



Mphiri Phalane


2013/01/16 at 1:31:07 PM GMT
Posts: 1

SETA grants are no longer regarded as being inclusive of VAT at the standard rate. The law was amended to introduce a provision to zero rate the receipt of SETA grants with effect from 1 April 2005. It follows that vendors will no longer be allowed to deduct input tax on any SDL payments made from April 2005 onwards

2013/01/16 at 4:22:39 PM GMT
Posts: 64

Hi Mphiri

Assuming you are referring to grants received from public authorities as defined in the Vat Act  ,my suggestion is that you need to read the whole  SARS Interpretation  Note 39 carefully, paying particular regard to the following paragraphs : 5. , 6.4 ,  6.9 and 6.11.2.

I believe once you have done this ,you will be in good position to take the matter further with SARS.

Good Luck.

2015/03/10 at 1:28:14 PM GMT
Posts: 1
Sorry if I am being a tad dense, but any income received by any organisation that does training (the corporation trains staff per contracts with various SETA), is exempt from VAT? Or is this the training done with the money received from SDL refunds?



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.

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