TRANSFER OF COMMERCIAL PROPERTY
Zero-rated transactions – understanding the basics
IN A ZERO-RATED TRANSACTION: VAT is payable on a property transfer, but at the rate of 0%andnot the standard rate of 15%.
WHEN IS IT APPLICABLE?
The transfer of a property can be zero-rated if the following conditions are met:
- Both the buyer and seller are registered for VAT. - The property/enterprise is sold as a going concern and it has an income-earning activity at the time of the sale (for example, there is a lease over the property). - A formal agreement is signed which states that the enterprise/property incorporates the above conditions and that the consideration for the supply includes VAT at a rate of 0% / or the parties agree that the sale is zero-rated for the purposes of VAT.
HOWWILL ALL OF THIS BE ACHIEVED? By incorporating the correct terms in the agreement, where applicable, a transaction can be zero-rated.
www.hammondpole.co.za
Made with FlippingBook Digital Publishing Software