A VAT domestic reverse charge (DRC) on valuable metal was introduced in the regulations published
in Government Gazette 46512 on 8 June 2022. See Regulations on Domestic Reverse Charge Relating
to Valuable Metal, issued under of section 74(2) of the Value-Added Tax Act, 1991 (Act 89 of
1991), Notice 2140 (the DRC Regulations). The DRC Regulations came into effect on 1 July 2022. For
more detailed information on the DRC Regulations, see the Explanatory Memorandum and Media
Statement. These three documents are available on the SARS website. The frequently asked
questions (FAQs) in this document have been compiled on the basis of questions that vendors and the
public at large have or are likely to have about the implications of the DRC Regulations.
The FAQs are drafted purely to assist vendors and the public at large to obtain clarity and to ensure
consistency on certain practical and technical aspects relating to the DRC Regulations. The FAQs are
therefore not intended to be used as legal reference. Questions not dealt with in these FAQs, can be
directed to [email protected].
The FAQs and the SARS landing page (VAT regulations on Domestic Reverse Charge relating to
valuable metal) will be updated periodically to address questions. In light of this, it is not envisaged
that VAT Rulings in relation to the DRC Regulations will be issued.
The return and the ruling referred to in the FAQs are available on the SARS website. Unless indicated
otherwise, the latest issues of these documents should be consulted.
1. Why were the Domestic Reverse
Charge (DRC) Regulations introduced?
The DRC Regulations were introduced as a
mechanism to curb the use of the value-added tax
(VAT) system as a tool to enable the legitimisation
of gold where such gold was sourced by illegal
means and thereby to stop the registration of a
chain of fictitious businesses to secure undue VAT
refunds.
..
Source: sars.gov.za
