Transcription of INTERPRETATION NOTE: NO. 57 ACT - SARS
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INTERPRETATION NOTE: NO. 57 ACT - SARS
INTERPRETATION NOTE: NO. 57 DATE: 31 MARCH 2010 ACT : VALUE-ADDED TAX ACT, NO. 89 OF 1991 (the VAT Act) SECTIONS : SECTIONS 8(7), 8(16), 11(1)(e) AND 18A SUBJECT : SALE OF AN ENTERPRISE OR PART THEREOF AS A GOING CONCERN Preamble In this Note legislative references to sections are to sections of the VAT Act unless otherwise stated. 1. Purpose This Note serves to set out the value-added tax (VAT) implications regarding the supply of an enterprise or part thereof as a going concern;1 and withdraw, in terms of section 5(2), VAT Practice Note: No. 14 issued on 20 January 1995. 2. Background The supply of an enterprise or of a part of an enterprise is a taxable supply which should be subject to VAT at the rate of 14%. However, provision is made in section 11(1)(e) for the supply of an enterprise or part of an enterprise which is capable of separate operation to a registered vendor, to be subject to VAT at the rate of zero per cent.
3 4.4 Time of supply As the disposal of an enterprise as a going concern is deemed to be a supply of goods, the time of supply is, subject to section 9(2), determined in section 9(1), that
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