The position of the South African Revenue Service (SARS) regarding the value added tax (VAT) treatment of aircraft leases is to separate the leasing of aircraft engines from the aircraft itself. Under this position, a non-resident lessor that leases only aircraft engines to be used in South Africa is deemed to have an enterprise for VAT purposes and must register for VAT when the value of the lease payments exceeds R1 million in any 12-month period.
Source: KPMG
