In VAT Connect Issue 7 (December 2017) we discussed the uncertainty regarding whether an independent contractor serving on the board of a public entity that is not a company, is required to register as a vendor and charge VAT on his or her services. In this instance there are no exceptions or special rules applicable and the normal VAT rules apply to determine your liability to register for VAT and to charge VAT. The same principles explained in Binding General Rulings 40 and 41 must be applied, irrespective of whether you carry the title of non-executive director (NED) or not.
Frequently Asked Questions on BGRs 40 and 41: Non-Executive Directors (VAT and PAYE) (Issue 2) have been updated to provide clarity on this point.
For further guidance on the VAT treatment of NEDs refer to the updated VAT Quick Reference Guide for Non-Executive Directors and the Frequently Asked Questions (FAQs).
Source: gov.za
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