South Africa Tax Agency Clarifies Transaction-Based VAT Apportionments for Money Transfer Services

The South African Revenue Service March 31 issued VAT Ruling No. VR 018, clarifying transaction-based VAT apportionments for money transfer services. The taxpayer, a private company operating in the financial services industry, conducted inbound and outbound money transfer transactions through a mobile application and earned income from transaction fees, foreign exchange margins, interest income, and other sources. The taxpayer sought clarification on whether it may apply the transaction count-based method to determine the ratio to be applied to VAT incurred relating to mixed-use expenses. Upon review, the Tax Agency clarified that the taxpayer may, for the purpose of determining the ...