Development Law Update | Issue 1 – 2018

Posted on: November 26th, 2018 by Francois Hagen

ZERO-RATING THE SUPPLY OF LOW INCOME HOUSING: WHICH PROJECTS ARE EXCLUDED FROM THIS RATING?

Commissioner for the South African Revenue Services v Amawele Joint Venture CC (908/2017) [2018] ZASCA 115 (19 September 2018)

In September this year, the Supreme Court of Appeal handed down judgment in the above matter.

The Court was tasked with determining whether the three housing projects under the Emergency Assistance Programme (EAP) and the Rectification and Revitalisation Programme (RRP), undertaken by Amawele for the KwaZulu-Natal Provincial Department of Human Settlements (Department), were VAT zero-rated supplies. The supply of services pursuant to these contracts would be zero-rated by virtue of section 11(2)(c), read with section 8(23) of the VAT Act, which provide for zero-rating of the deeming provision of services to public authorities and municipalities funded by the Housing Subsidy Scheme as identified in section 3(5)(a) of the Housing Act 107 of 1997.

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TEMPORARY LETTING OF RESIDENTIAL DWELLINGS BY DEVELOPER: IF THE LETTING PERIOD ENDS AFTER 1 JANUARY 2018, HOW MUST VAT BE ACCOUNTED FOR?

SARS Binding General Ruling (VAT) 48 – 25 July 2018

In a Binding General Ruling issued on 25 July this year, SARS clarifies how developers should calculate their VAT liability where they used the section 18B relief after letting property that was intended to be sold on the open market. The window period in which the relief was available terminated on 1 January 2018. How the VAT calculation works if the letting period ends after 1 January 2018 is addressed in the Ruling.

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