VAT Ruling on Apportionment Method for South African REIT Listed on JSE

• VAT ruling VR 011 issued on 30 May 2025 under the Value-Added Tax Act 89 of 1991
• Concerns sections 17(1) and 41B of the VAT Act
• Ruling is specific to the Applicant and binding only on SARS
• Approves a varied turnover-based method of apportionment for a South African REIT listed on the JSE
• Relevant tax laws include sections 1(1), 16, and 17(1) of the VAT Act
• Applicant is a listed South African REIT in the Real Estate Holdings and Development Sector
• Applicant’s activities include acquiring and holding investments in offshore commercial property companies and trading in asset-based financial services
• Income streams include interest from loans to foreign entities, exempt income from local banks, foreign exchange gains and losses, gains and losses from derivative instruments, and dividend income from offshore investments
• Ruling allows the varied turnover-based method to include all income streams with specific variations
• Taxable supplies include the greater of net interest received on loans to foreign entities or the interest margin
• Exempt supplies include a five-year moving average of net realised foreign exchange gains and net realised margin from interest rate and cross currency swaps

Source: sars.gov.za

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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