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What are the VAT consequences for an individual involved in the training and development of SMEs?

Monday, 02 March 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: There is client who is involved in the training and development of small and medium enterprises (SMEs) nationally. I would like to know their status in terms of paying VAT. Are they supposed to be charging VAT or not?

A: The supply of education and training will constitute a taxable supply for VAT purposes unless specifically zero rate or exempt. We assume all the training occurs in South Africa to SA residents. The exemption from VAT for the supply of educational services only applies to the supplies listed in section 12(h) of the VAT Act, which includes supplies made by the state or a registered school, by a higher education institution established or registered in terms of the Higher Education Act, by an approved Public Benefit Organisation for specified types of education and services by a university or technikon. 

You would therefore have to determine whether the vendor is so registered above and making supplies in terms of such registered activities. 

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.



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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