Early payment discount vat
In such a scenario it seems clear that a tax invoice has to be issued daily christian book deals to the nba d league slam dunk contest 2015 recipient for the higher amount, and if the recipient pays early and qualifies for the lower amount, a credit note needs to be issued to the recipient.
Early Settlement Discounts And VAT, insights from the GUD Holdings (Pty) Ltd v sars court case.
For instance, there may be uncertainty as to what the value of the supply is, what amount should be reflected on the tax invoice and whether any credit or debit notes need to be issued.However, this is not necessarily helpful as the vendor deep discount trading review would still have to account for output VAT in respect of the applicable tax period, and if the consideration does not become certain by that time, the vendor may not know which amount to account for.In practice, vendors may issue invoices stating both the higher and lower amounts and the condition sunder which either will apply.In GUD Holdings (Pty) Ltd v Commissioner for the South African Revenue Service 69 satc 115, the court characterised what would generally be termed a 'settlement discount' not as a discount but as a late payment penalty, in line with the second scenario above.At the time of supply, the consideration is completely uncertain and not determinable.Here it seems that a tax invoice has to be issued to the recipient for the lower amount, and if the recipient pays late, a debit note needs to be issued to the recipient in terms of Section 21(1 c) of the VAT Act, indicating.Secondly, one could view the transaction as a supply, the consideration for which is determined upfront as being a lower amount, but if payment is made after a certain date, the consideration will be increased to a higher amount.Full details of these changes can be found in the hmrc policy paper Revenue and Customs Brief 49 (2014 VAT Prompt Payment Discounts, which you can access.
It seems that for the most part the proper treatment of an early settlement discount will depend on the facts.
Customers receiving early settlement discount offers may only recover as input tax, the VAT stated on the invoice.
Here or contact our Sage team via).Secondly, one could view the transaction as a supply, the consideration for which is determined upfront as being a lower amount, but if payment is made after a certain due date, the consideration will be increased to a higher amount.Sars recently released Binding General Ruling 6, in which it rather briefly deals with the issue of early settlement discounts in the fast moving consumer goods industry.How will the VAG cater for that?From this judgment it is clear that it would depend on the facts, and specifically on the wording of any agreements, whether one is dealing with a discount or a penalty.Since a VAT vendor who makes a taxable supply has to issue a tax invoice to the recipient within 21 days of making the supply, in terms of section 20 of the VAT Act, No 89 1991 (VAT Act and since the VAT vendor has.The ruling simply states that a vendor must issue a credit note for a discount if the discount: - alters the original purchase price of a supply of goods or services in terms of an agreement with the recipient; and - results in the tax.From this judgement, it is clear that it would depend on the facts, and specifically on the wording of any agreements, whether one is dealing with a discount or a penalty.