Betty Bookkeeper explains Input and Output VAT for a CC – Jan 2016

Hi Betty 

My client has two registered CCs, each with a trust account and cheque account. But they run the business as one business and there are a lot of transfers between the bank accounts. They are registered for VAT. Where does the VAT input and output come from? How does it work?

Kind regards,

Hi Nicky

Each registered CC must be treated as a separate business for VAT purposes. Where a CC makes a taxable supply, they must issue a tax invoice and charge Output VAT at 14% on this supply. Input VAT can be claimed on goods/services acquired by each entity in the course of making taxable supplies, providing they are in possession of a valid supplier’s invoice reflecting the CC’s name, VAT registration number and address as well as the VAT charged.

The VAT treatment of transfers between the CCs will be determined by the nature of the transfer – if the one CC is making a supply of services/goods to the other then this is a VAT-able supply (the CC making the supply must charge Output VAT and pay this over to SARS, the CC purchasing the supply can claim back the input VAT from SARS). If the transfer relates to a loan then there is no VAT implication for either CC. Similarly intra-company bank account transfers (i.e. from the trust account to the cheque account and vice versa) is simply a re-allocation of funds within the company which will have no VAT impact i.e. no VAT must be charged or claimed in this instance.

Hope that helps!

Don’t forget that I’m here to answer your questions about the ICBA, or just queries about your accounting at work. All you have to do is email me!

Treasury announces tax changes for retirement funds in 2016

Article source: Accounting Weekly 

The tax harmonisation reforms for retirement funds will be implemented from 1 March 2016‚ the Treasury says.

“This is in terms of the current law legislated in 2013‚ and amended in 2014 by shifting the effective date to 1 March 2016 (ie the Taxation Laws Amendment Act‚ No 39 of 2013‚ as amended by Act No 43 of 2014).

The 2015 Taxation Laws Amendment Bill did not amend the scheduled implementation date‚ “but only amends the R 150‚000 de minimis threshold to R 247‚500; closes certain coverage gaps; and requires a review of the legislation after two years from the effective date‚ and to report this review to Parliament”‚ the Treasury said.

Both Houses of Parliament had now passed the Taxation Laws Amendment Bill‚ 2015‚ which now only awaited the assent of the President‚ expected to be later this month or early January 2016‚ it added.

The National Council of Provinces (NCOP) passed the Bill on 1 December‚ after the National Assembly passed the Bill on 26 November.

In terms of the reforms‚ all individual taxpayers who contribute towards a retirement fund (pension or provident fund or retirement annuity) after 1 March 2016 (ie from the next tax year)‚ will qualify for a tax deduction up to 27.5% of the greater of taxable income or remuneration‚ up to a limit of R 350‚000.

The law also allows one-third of the retirement saving to be cashed out as a lump sum‚ with the remaining two-thirds to be annuitised.

“This law already applies to all pension fund and retirement annuity fund members‚ but will now be extended to members of provident funds.

“Hence‚ all new contributions into provident funds after 1 March 2016 by those younger than 55 years will be subject to the two-thirds annuitisation requirement‚ but only once the amount at retirement exceeds the de minimis threshold. It will take several years before many provident fund members under the age of 55 years reach this higher limit‚” the Treasury said.


Renew your ICBA membership and keep those letters behind your name

As an ICBA member, you’ve enjoyed the prestige of those all-important letters behind your name. Why not keep them there – and get loads of other benefits – in 2016?

How to renew your membership

All you need to do is:

Membership renewal fees

  • Annual membership renewal – all qualified members: R 500
  • Annual membership renewal – students (excludes use of designations): R 430

Remember that you can receive a discounted ICBA membership if you’re a registered ICB student.

Why be an ICBA member?

When you are a paid-up ICBA member you will:

  • Be able to place those all-important ICBA letters after your name (except for student members).
  • Be able to use the ICBA logo on your business cards, letterheads, websites, and other marketing collateral. For more detailed information, please download the ICBA Logo Usage Policy.
  • Receive an ICBA membership certificate.
  • Receive our FREE tax booklet (hard-copies/electronic).
  • Receive a FREE ICBA Members’ Notebook.
  • Receive discounts on workshops and seminars run by SAIT, SAAA, Pastel and more.
  • Be able to apply to SAIT to become tax practitioner – and get discounted SAIT membership fees. But only if you have the required work experience and ICB qualifications behind you (FETC: Bookkeeping (NQF Level 4) and above). Download the ICBA Tax Practitioner Guideline here.
  • Be able to apply for exclusive access to Pastel’s Bookkeepers’ Forum, which entitles you to a software welcome pack, priority telephone support, invitations to Pastel seminars, and much more. Only ICBA members who are bookkeepers in private practice can apply.
  • Be able to ask Betty Bookkeeper any work-related questions – she’s your personal technical helpdesk!
  • Be able to apply to become an Accounting Officer through SAIBA. ICBA members with the required work experience and ICB qualifications behind them (National Diploma: Financial Accounting NQF Level 6) can apply.
  • Be able to perform the duties of an ex-officio Commissioner of Oaths if you’re a Certified Technical Financial Accountant and Certified Financial Accountant.

We’re looking forward to having you as ICBA members in 2016!


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New TaxPlanner 2017 – to be released in March 

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A system providing a single toolset to handle the complete tax submission process, consisting of the following:

  • Provisional Tax Payments IRP6.
  • Assets & Liabilities / All income & deductions.
  • Logged time against client file.
  • Professionally designed reports all coded for SARS eFiling.
  • Standard letters to SARS and client.
  • ALSO Includes FINPACK to generate Income Statements, Statement of Assets & Liabilities as well as disposable Income Reconciliation Summary.

40% discount offer is only valid until 25 January 2016!

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