A critical analysis of the South African vat single and composite supply rules

Abstract

The policy developments should consider not only domestic law but also the international cognisance where necessary. The study argues that the current determination of a separate part for VAT purpose is uncertain. The current value-added tax rules do not provide under what circumstances will a taxpayer make a separate supply for VAT purposes. This creates legal uncertainty and compromises certainty and predictability that are undeniably foundation of the tax system. As single or composite supply forms part of the value-added tax system, the absence of clear rules on how to determine a separate supply in SA warrant guidance. To reduce the legal uncertainty, the research argues SARS needs to provide the guidance.