South Africa Tax Agency Issues Binding General Ruling Clarifying Input VAT Deduction on Exempt Supplies

The South African Revenue Service June 21 issued Binding General Ruling No. 64, clarifying rules for real estate developers to claim input VAT deductions on exempt supplies of real estate-related goods and services, when leasing a newly-developed property to renters while marketing it for sale. The ruling clarifies: 1) input VAT deductions on exempt supplies, for leasing of newly-developed dwelling units by a developer, for use as residential accommodation for a period of 12 months or less, while the property continues to be marketed for sale; 2) the requirement for the purchaser to pay transfer duty when a sale isn’t ...