Has anyone the answer to the following dilemma. SARS does not seem to know either as they have not repied to my query of 2 weeks ago.
The company concerned is a rental agent which arranges leases on residential properties. Up to now it has not been registered for VAT, but now the turnover dictates that it must register. The rental amounts are exempt from VAT but the commission is VATable. There are leases signed a year in advance and make no provision for VAT to be charged on the commission, as this was not required before registration.
From registration, obviously new lease will have to include VAT, but what happens to the existing leases. Are these allowed to run their course as exempt of VAT, or does the agency have to "absorb" the VAT even though it has not charged the landlords VAT. It will not be possible to change the terms of the contract to include VAT as the landlords are mostly not VAT registered so they are not prepared to pay more than their contracted onbilgation.
Any answers and if possible references would be gratefully received