VAT Implications on Sale of Fixed Assets and Joint Venture Interest by Resident Company

• The ruling addresses the VAT consequences of a resident company selling fixed assets and a joint venture (JV) interest to a foreign company.
• The JV operates the applicant’s assets on a cost recovery basis, and the sale includes a 36.36% undivided interest in both the assets and the JV agreement.
• The foreign company assigned its rights and obligations under the sale agreement to a South African subsidiary.
• The sale of the fixed assets and JV interest is subject to VAT at the standard rate under section 7(1)(a) of the VAT Act.
• The ruling applies only to the specific transaction described and is not generally applicable.

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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