VAT Focus: Agency Rules

The Value-Added Tax (VAT) treatment of agency transactions is relatively straight forward. On the other hand, establishing whether a person is acting as the agent or principal in respect of a supply of goods or services can be very complex.

The term “agent” is not defined in the VAT Act and therefore we need to refer to common law to understand this concept. Furthermore, in terms of Public Notice 748, the Commissioner of SARS may reject an application for a AT ruling to determine whether a person is acting as an agent or principal in respect of the supply of goods or services.

It is of utmost importance to understand the VAT principles concerning agents as the VAT consequences of a transaction cannot be determined until the contractual relationship between the parties is established.

During this webinar we unpack:

What is an agent?

  • Case law
  • VAT Guide 411 & Interpretation note 42
  • The agency mandate / contract

 VAT treatment of agency transactions

  • General rules under section 54
  • Documentary requirements (including agency statements)
  • Disbursements vs Recovery of cost
    • Overview
    • United Kingdom guidelines
    • Employee reimbursements
    • Inter-company cross-charges
  • Auctioneers

 Cross-border transactions

  • Import of goods
  • Export of goods
  • Intermediaries of foreign supplies of electronic services

 System requirements

Cost: R546.25 (incl. VAT)

CPD:  1.5 hours