HomeHome SearchSearch MenuMenu Our productsOur products

Are you a broker or commission agent? Then you MUST know these 4 VAT responsibilities

by , 21 December 2015
If brokers and commission agents don't deal with VAT correctly, SARS can assess them, adding penalties and interest for anything that's wrong.

So follow these 4 responsibilities to keep you in the clear:

Responsibility#1: Register for VAT

When your total commission received within any 12-month period exceeds R1 million, you must register for VAT.

But if your commission exceeds R50 000, then you can apply for voluntary VAT registration.

Got VAT problems?

Get professional, 100% legal solutions you can use immediately to sort out all your VAT issues.

Click here
Responsibility#2: Apply these 2 VAT rules

Rule#1: Charge VAT on your commission

The VAT which you earn on your commission is output tax, and it's your duty to pay this over to SARS.

When you earn commission on a sale, you pay output, irrespective of whether the sale was at the standard rate, zero-rate or exempt VAT rate.

Rule#2: Issue a tax invoice

You must issue tax invoices to the businesses who pay you commission.

All VAT vendors must issue tax invoices for sales exceeding R50, and it's considered an offence not to do so.

But you can have a self-invoicing arrangement, as shall be seen next…

Responsibility#3: Self-invoicing

This is where the principal issues tax invoices to claim input tax. He must give the seller a copy.

Both parties must agree, in writing, to this and agree that the seller (agent) won't also issue a tax invoice.

NOTE: SARS has issued binding general ruling number 15 which deals with self-invoicing.

Responsibility#4: Report to a principal correctly

As an agent, you're not required to give copies of tax invoices relating to sales on behalf of your principal to him.

But you must give your principal details of all your income earned from these sales, with the VAT amount as well.

You can lay out these details in the form of a summary which includes the date, what you supplied and the price including the VAT. The reason for this is that your principal can't see who your customers are and potentially bypass you in the future.
Those were 4 VAT responsibilities you have as a broker or commission agent. To learn more useful VAT information on brokers and commission agents, subscribe to the Practical VAT Loose Leaf Service.  

Related articles

Related articles

Watch And Learn

Related Products


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance

Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today

Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism

This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands

Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>