Summary Tax3701 ️ Taxation of Business Activities Pack ️

TAX3701

Quick exam
preparation notes,
small business case
and past exams and
answers.

, TAX3701 PRE-EXAM QUICK NOTES:

1. VAT – 14% if amounts exclude VAT; 14/114 if amounts include VAT
a. Compulsory registration: total value of taxable supplies for the
preceding 12 months exceed R1 million
b. Voluntary registration: total taxable supplies for the preceding 12
months exceed R50 000
Output VAT: levied on services rendered by
the taxpayer (on invoice amount, not the
amount received)
Goods supplied or services rendered x 14% XXX
Exempt supplies: nil
• Financial services
• Donated goods
• Residential accommodation
• Commercial property if owned for
less than 28 days (if more than 60
days taxpayer must pay VAT on 60%
of the whole charge, vendor can
claim full input VAT)
• Hire and letting accommodation
• Sale or letting of land outside SA
• Services of body corp when paid for
by levies
• Transporting of fare paying
passengers and their personal items
in taxi or bus
• Educational services by state school
or varsity that is a PBO
• Varsity, school, technikon, or college
fees
• Childcare services by crèche or
aftercare
Fringe benefit: use of MV
Cost (excl VAT) XXX
Consideration: if it is a motor vehicle
as defined, multiply by 0.3%; if it is
not, multiply by 0.6% XXX
(Less) Deductions (XXX)
Multiply by tax fraction (14/114) XXX
Multiply by the percentage of taxable
usage XXX XXX
If it is a motor car as defined, input tax is
denied, if not the employer can claim VAT
paid on the vehicle as an input tax credit
(XXX)
Zero-rated items: XXX x 0%
• Export of moveable goods overseas