VAT and levies explained - Finance, Advice
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12 Apr 2018

VAT and levies explained

The recent change in the VAT rate, from 14 to 15 percent, prompted a revisit of the issue around VAT with regards to levies in body corporates, share-block companies and homeowners’ or property owners’ associations in South Africa.

Levy income for body corporates, share block companies or homeowners’ associations (except those created for managing time-share schemes) is exempt from VAT, says Bester.

According to Martin Bester, Managing Director of Intersect Sectional Title Services, a subsidiary of the Spire Property Group, levy income for body corporates, share block companies or homeowners’ associations (except those created for managing time-share schemes) is exempt from VAT.

Bester says this is provided such schemes supply services to their members and the costs for these services are paid from levy fund contributions received from members.

However, such schemes may apply to SARS for voluntary registration as VAT vendors.

He says this would typically apply to schemes of a mixed-use, commercial, industrial and or retail nature, as very few residential schemes would warrant voluntary VAT registration.

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