More than a year later, HMRC visited the seller and exploited the tax. The seller invoked the general clause allowing him to charge VAT to the buyer. The buyer did not want to pay, and there was a dispute. In both cases, both parties should insist on “basic” VAT clauses proving that the net price is unique and that VAT is at a reasonable rate (in this case, 20%) added to the net price. The buyer only pays VAT if the supplier issues a correct VAT bill. The agreement should indicate what happens if SARS decides not to rate the transaction at zero. Ideally, the agreement should indicate that the buyer has VAT at the normal rate (14%) 1992, point 1. in addition to the price. The agreement should also indicate when VAT should be paid. Under the title “Transfer and Borrowing Fees,” the agreement provided that the buyer “would bear all transfer, transmission and/or VAT and bond registration costs.” However, at first, no VAT payment had been contemplated, as the property was subject to a lease agreement and was sold as a current business. As a result, the turnover under Law 89 No. 89 of 1991 on the VALUE-added TAXE was assessed excluding VAT under VAT Act 89 1991. (This provision stipulates that when a VAT seller sells a business to another VAT seller and certain requirements are met, VAT is zero per cent).
In a brief question, if the agreements between the parties were properly interpreted, VAT should have been considered part of the purchase price and therefore not separate, and therefore, if the seller asked for a guarantee, the buyer was required to provide a guarantee only for the purchase price or for the purchase price plus VAT? The facts of the case are complex. To simplify, the seller sold commercial goods to the buyer. The sales contract, which has undergone certain permutations, stipulated that parties to the contracts for the sale of real estate should be very careful when drawing up VAT clauses. If the transaction is structured as an ongoing transaction with a zero-rating transaction, the parties should include the mandatory declarations in the sales contract, including that the transaction is sold as a current entity, that the price includes VAT at 0% and that the entity will be an income-related activity at the time of the transfer. The agreement should specify the purchase price and whether or not it excludes VAT. (If the agreement says nothing about it, the price is considered VAT). The agreement also provided that the buyer had to pay VAT in exchange for the delivery of a tax bill if the South African Revenue Service (SRAS) decided that VAT should be paid (the zero rating was not valid for any reason). Whether you bought a car, sold your restaurant or signed a rental agreement, you must sign a contract.