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Binding General Ruling 11: foreign exchange rates that must be used for VAT invoices

Monday, 30 July 2012   (1 Comments)
Posted by: SAIT Technical
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By SARS Legal & Policy

SARS recently issued BGR 11 that prescribes the foreign exchange rate that must be used when issuing tax invoices as well as for determining the output tax due where the consideration for the standard rated supply is in a foreign currency.

This BGR becomes effective on 1 September 2012 and all rulings issued in regard to the use of an exchange rate for purposes of issuing a tax invoice are withdrawn with effect from this date.


The issue under consideration is the exchange rate that should be applied to determine the consideration in Rands for purposes of complying with section 20(4) and (5) as well as for determining the vendor's output tax liability.


A vendor is required to issue a tax invoice that complies with section 20(4) or (5), in the currency of the Republic within 21 days of the date of the supply. In addition to the requirements as set out in section 20(4) or (5) as the case may be, the vendor must also reflect the consideration for the supply in a foreign currency as well as the relevant exchange rate on the tax invoice. In this regard, it will be acceptable to the Commissioner if vendors use the applicable daily exchange rate as published on the South African Reserve Bank website, at the time of supply, to determine the Rand equivalent of the consideration for the supply.

The consideration as reflected on the tax invoice must be reflected as output tax in the vendor's VAT 201 return for the applicable tax period.

Click here to download VAT BGR 11.


Michael G. White says...
Posted Sunday, 26 August 2012
You will notice that the last paragraph states that the "the consideration ...must be reflected output tax ... in...vat 201...".Following this ruling will thus be highly prejudicial to vendors who are not vigilant ,since they would end up overpaying SARS most significantly. The good news is that SARS has since removed the prejudicial words.



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