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Thread: Hello - subscription zero rated or VAT exempt

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    Hello - subscription zero rated or VAT exempt

    Hi everyone,

    My name is Clair

    I wonder if anyone can help me, I need to find out id Data base subscriptions are either zero rated or VAT exempt.
    I have read through the VAT 404 Guide and still have no clue.

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    Site Caretaker Dave A's Avatar
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    Welcome to TFSA, Clair.

    Quote Originally Posted by Clair View Post
    I need to find out id Data base subscriptions are either zero rated or VAT exempt.
    Which Data base?
    Who is the supplier?

    p.s. - may I move this thread to the tax forum
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    Clair (12-Jul-12)

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    Hi,

    Yes you can move it,

    I am a bookkeeper for a subscription agency, (WWIS), The Data Based Journals and archives that we supply to the Universities have always been charged at Zero Rated, I would just like to make sure all is in order. The data subscriptions are from European companies, we have special permission from the Reserve Bank to charge Foreign currency to SA Universities, We charge VAT on SA publications.

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    Diamond Member Justloadit's Avatar
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    I would say Zero Rated. When I invoice foreign companies for goods and servioces, the VAT is Zero.

    However you have to be careful though. If they physically walk in and collect goods, you have to charge the 14% VAT, and when they reach the border/Airport, they would then be refunded their VAT from the invoice, as it will get an export customs stamp on the invoice, which is proof of export of the goods.

    If a transport company acts on their behalf and collects goods, then you require an exporters license, and the invoice must be stamped by the bank, and would be Zero rated.
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    Platinum Member Mike C's Avatar
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    When we sell fertilizer to farmers they have to give us a copy of their VAT certificate which specifically states that they are zero-rated for agricultural purposes. We have to keep those certificates on file in case of a SARS audit.
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    Thank you so much for all the help. The Journals are all electronic.

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    Quote Originally Posted by Clair View Post
    I am a bookkeeper for a subscription agency, (WWIS), The Data Based Journals and archives that we supply to the Universities have always been charged at Zero Rated, I would just like to make sure all is in order. The data subscriptions are from European companies, we have special permission from the Reserve Bank to charge Foreign currency to SA Universities, We charge VAT on SA publications.
    It seems like WWIS is only making taxable supplies (unlike any university). If the university acquired the services (i.e. data subscriptions are rights) directly, same would probably have to declare VAT on imported services.

    I do not think that WWIS can supply the services to the university at the zero-rate I think this is a taxable supply of services subject to VAT at the standard rate (s. 7(1)(a)).

    Regarding the invoice in foreign currency, you are contravening s. 20(5) since you are incorrectly issuing a tax invoice in respect of a standard rated supply, in a foreign currency. Regardless of SARB approval, unless you have received a directive from SARS (probably issued in terms of section 20(7) of the VAT Act), you will be committing an offence ito s. 58(l).

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    Clair (16-Jul-12)

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