Value-Added Tax Act, 1991 (Act No. 89 of 1991)

Part VIII : Special Provisions

50. Separate enterprises, branches and divisions
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(1)Where separate enterprises are carried on by any vendor or an enterprise is carried on by any vendor in branches or divisions, the vendor may apply in writing to the Commissioner for any such separate enterprise, branch or division to be registered separately for the purposes of this Act: Provided that the activities carried on by a vendor, being an implementing agency, in the course of implementing, operating, administering or managing a foreign donor funded project shall, for the purposes of subsection (2A), be regarded as an enterprise carried on separately from that vendor’s other enterprise activities.

[Section 50(1) provisio inserted by section 72(1)(a) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - effective 1 April 2020 (Section 72(2)]

 

(2)Subject to the provisions of subsection (2A), the Commissioner shall, upon application made under subsection (1), register any separate enterprise, branch or division as a separate vendor if each such separate enterprise, branch or division maintains an independent system of accounting and can be separately identified by reference to the nature of the activities carried on or the location of the separate enterprise, branch or division, and where any such separate enterprise, branch or division is so separately registered, the activities carried on by that separate enterprise, branch or division shall be deemed to be carried on by a person separate from the vendor referred to in subsection (1).

[Section 50(2) substituted by section 72(1)(b) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), Notice No. 21, GG42951, dated 15 January 2020 - effective 1 April 2020 (Section 72(2)]

 

(2A) The implementing agency shall be required to make application to the Commissioner to register the activities referred to in the proviso to subsection (1) as a separate branch of the vendor: Provided that the activities in relation to each foreign donor funded project shall be registered as a separate branch of the vendor and such vendor shall maintain an independent system of accounting for each foreign donor funded project.

[Section 50(2A) inserted by section 72(1)(c) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - effective 1 April 2020 (Section 72(2)]

 

(3)The Commissioner may, with effect from a date determined by him, cancel any registration in terms of subsection (2) of any separate enterprise, branch or division, if—
(a)the vendor referred to in subsection (1) has applied to the Commissioner in writing for such registration to be cancelled; or
(b)it appears to the Commissioner that the duties or obligations of such separate enterprise, branch or division have not been satisfactorily performed or carried out,

and any activity carried on by that separate enterprise, branch or division shall as from the said date be deemed to be carried on by the said vendor.

 

(4)The Commissioner shall cancel the separate registration of any separate enterprise, branch or division on the cancellation of the registration of the vendor referred to in subsection (1).

 

(5)Where any separate enterprise, branch or division separately registered under this section fails to do anything required to be done under this Act, the liability for the doing of that thing shall revert to the vendor referred to in subsection (1).

 

(6)Notwithstanding the preceding provisions of this section, any decision or determination of the Commissioner made under section 15 or 27 in respect of the vendor referred to in subsection (1) of this section shall, for the purposes of this Act, apply equally to each separate enterprise, branch or division of the vendor which is separately registered under this section: Provided that where a decision or determination is made by the Commissioner under subsection (2) of section 27 which applies in respect of any such separate enterprise, branch or division, this subsection shall not be construed as preventing the Commissioner from making a separate decision or determination under subsection (4) of the said section in the circumstances contemplated in that subsection in respect of any other separate enterprise, branch or division of the said vendor.

 

(7)Notwithstanding the provisions of this section, any amount that is refundable under section 190 of the Tax Administration Act (including interest thereon) to the vendor referred to in subsection (1) or any separate enterprise, branch or division, which is registered separately in terms of  subsection (2), may be set off against the outstanding tax debt of the vendor referred to in subsection (1) or any separate enterprise, branch or division, which is registered separately in terms of subsection (2), as the case may be.

[Section 50(7) inserted by section 13 of Notice No. 16, GG 42169, dated 17 January 2019 (Tax Administration Laws Amendment Act, 2018 (Act No. 22 of 2018)]