VATupdate

South Africa to introduce a domestic reverse charge mechanism relating to valuable metal

On June 13, 2022 the National Treasury Department of the Republic of South Africa on its website published the Regulations on domestic reverse charge relating to valuable metal, issued in terms of section 74(2) of the Value-Added Tax Act, 1991 (Act 89 of 1991) that were published in the South African Government Gazette of June 8, 2022 and the accompanying Explanatory Memorandum. The Regulations are an anti-abuse measure aimed at foreclosing schemes and malpractices to claim undue VAT refunds from SARS by vendors operating in the value chain relating to high-risk goods containing gold, for example, gold, gold bars, gold granules, gold doré or jewellery (“valuable metal”). The Regulations make provision for registered vendors acquiring valuable metal, to pay VAT on the supply of “valuable metal” over to SARS before these registered vendors can claim the VAT input tax refund.

Source International Tax Plaza

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