The unfortunate timing of BGR55 for developers

In terms of the Tax Administration Act, the South African Revenue Service (“SARS”) can issue Binding General Rulings (“BGR“) on matters of general interest or importance and clarifies the Commissioner’s application or interpretation of the tax law relating to these matters. BGR55 (issued on 10 September 2020) clarifies the VAT consequences of the sale of fixed property consisting of dwellings, by a developer, pursuant to such dwellings being deemed to have been supplied by the developer under section 18(1) or 18B(3) of the VAT Act. 

The issue 

As a result of so-called “change in use adjustments” catered for in the VAT Act, property developers that applied their fixed property for letting as a result of adverse economic factors (thus, letting the properties as opposed to selling it) became liable for an output tax adjustment where input tax was previously deducted – since they will no longer sell the buildings, but will lease it for residential purposes, which is an exempt activity from a VAT perspective. 

Previously, SARS provided some temporary relief where dwellings were constructed, extended or improved for the purpose of sale; and subsequently rather used for exempt supplies, namely, supplying accommodation in a dwelling under an agreement for the letting and hiring thereof on a temporary basis. The temporary relief was initially intended to expire on 1 January 2015. However, the relief period was extended until 31 December 2017. Any dwelling that is temporarily let for the first time from 1 January 2018 will not qualify for the relief. Developers that let dwellings for the first time, in terms of an agreement entered into on or after 1 January 2018, are required to account for the output tax adjustments. 

The ruling 

SARS have now confirmed, in BGR55, that developers that have not accounted for the aforementioned output tax adjustments in the relevant tax periods are liable to be assessed for VAT, penalties and interest. To ensure compliance, developers are encouraged to remedy their tax affairs by means of voluntary disclosure where they have failed to make the required VAT adjustment in past tax periods. 

In the current challenging economic climate, this ruling is unfortunate, and developers would have likely wanted a reintroduction of the relief previously granted. Fortunately, there has been an increased level of response from the SARS VDP unit in recent times, and taxpayers will likely be able to sort out their affairs quicker than before.  

Requests for reasons for an assessment can be made on the eFiling system under the dispute section, as part of a taxpayer’s profile. When there is even the slightest uncertainty as to the reasons for an assessment, taxpayers are strongly advised to request reasons to ensure that they provide themselves with the best possible chance of success in a dispute.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Wenke om geregistreerde besonderhede op datum te hou

Voordat u jaarlikse opgawe voltooi word, is dit belangrik om seker te maak dat kontak-, adres-, bank- en openbare offisiersbesonderhede van die entiteit (hetsy vir ’n individu, maatskappy, trust of enige ander entiteit) korrek is, deur dit te bevestig en op te dateer met gebruik van die RAV01-vorm. Die RAV01-besonderhede kan op twee maniere bevestig en opdateer word, naamlik via eFiling of deur ’n SAID-tak te besoek.


Veranderinge wat via eFiling kan geskied:

  • sekere identiteitsinligting (bv. naam en van);
  • bankbesonderhede;
  • adresbesonderhede;
  • kontakbesonderhede; en
  • handelsnaam van ’n entiteit.


Indien die validering van u bankbesonderhede onsuksesvol is op eFiling, sal u versoek word om ’n SAID-tak te besoek om u bankbesonderhede persoonlik te bevestig. Sekere besonderhede soos registrasienommers en ID-nommers sal gesluit wees en die opdatering van hierdie velde kan slegs by ’n SAID-tak gedoen word.


Veranderinge wat slegs by ’n SAID-tak aangebring kan word:


  • Die aard van die entiteit (bv. maatskappy, trust en BK)
  • Identiteitsnommer / paspoortnommer / ondernemingsregistrasienommer (bv. ID-nommer, CIPC nommer of trust nommer ens.)
  • Bankbesonderhede – slegs onder die volgende voorwaardes:
    • wanneer ’n derdeparty se bankbesonderhede betrokke is;
    • wanneer die entiteit ’n trust is;
    • wanneer die entiteit gekodeer as bestorwe boedel; en
    • wanneer bankbesonderhede via eFiling verander word en addisionele validering benodig word.


Opdatering van bankbesonderhede:


Slegs die spesifieke belastingbetalers (individue), publieke amptenare (maatskappye en trusts) en geregistreerde belastingpraktisyns is by magte om bankbesonderhede te wysig. Dokumente wat nodig is om geregistreerde besonderhede op te dateer sluit in:


  • getekende volmag (waar u van ’n belastingpraktisyn gebruik maak);
  • resolusie vir die aanstelling van die publieke amptenaar (in gevalle anders as ’n individu);
  • gesertifiseerde afskrifte van identiteitsdokumente van belastingbetaler en alle direkteure (in gevalle anders as ’n individu);
  • nuutste registrasie dokumente en akte van oprigting van die entiteit (in gevalle anders as ’n individu);
  • bewys van die fisiese adres van publieke amptenaar asook die entiteit (in gevalle anders as ’n individu); en
  • oorspronklike bankstaat, in die naam van die belastingbetaler, nie ouer as drie maande vanaf die datum van die afspraak nie.


Om enige onnodige besoeke aan ’n SAID-tak te verhoed, beveel ons u aan om ons as u geregistreerde belastingpraktisyn so spoedig moontlik van enige veranderinge aan u geregistreerde besonderhede in kennis te stel, om ons sodoende die kans te gee om u besonderhede te wysig voordat u volgende opgawe ingedien word.


Hierdie artikel is ʼn algemene inligtingsblad en moet nie as professionele advies beskou word nie. Geen verantwoordelikheid word aanvaar vir enige foute, verlies of skade wat ondervind word as gevolg  van die gebruik van enige inligting vervat in hierdie artikel nie. Kontak altyd ʼn finansiële raadgewer vir spesifieke en gedetailleerde advies. (E&OE)

2018 Tax Season: SARS shortens submission period

The annual tax filing season is upon us and acting SARS Commissioner, Mark Kingon, announced that the season will open on 1 July 2018 for eFilers. SARS branches will assist taxpayers from 2 July 2018. The filing season will then end on 31 October.


To improve efficiency, the season will be shortened by three weeks, which will allow additional time for SARS, taxpayers, and the tax fraternity in general, to deal with all tax verifications before the December holiday break.


Manual and provisional taxpayers submission deadlines:


Type of Taxpayer Channel Deadline
Non-provisional and provisional Manual – post or at SARS branch drop boxes 21 September 2018
Non-provisional eFiling or electronic filing at SARS branch 31 October 2018
Provisional eFiling 31 January 2019


Who does this shortened filing season impact?


  • All individual non-provisional taxpayers
  • Provisional taxpayers who opt to file at a branch
  • Provisional taxpayers who use eFiling


A taxpayer is completely exempt from submitting a tax return if all the following criteria apply:


  • The taxpayer’s total employment income/salary for the year of assessment (March 2017-February 2018) before tax was no more than R350 000.
  • Employment income/salary for the year of assessment was received from one employer.
  • The taxpayer has no other form of income, e.g.:
  • car allowance or company car fringe benefit
  • business income
  • taxable interest
  • rental income
  • income from another job.
  • The taxpayer does not want to claim for any additional allowable tax related deductions or rebates (e.g. medical expenses, retirement annuity contributions, travel expenses, etc).


Should you have any questions related to the 2018 tax return season, please feel free to contact us.


This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


References: (2018). Tax Season. [online] Available at: [Accessed 5 Jun. 2018].


Fin24. (2018). SARS cuts deadline for tax returns. [online] Available at: [Accessed 5 Jun. 2018]. (2018). 4 June 2018 – Tax Season 2018. [online] Available at:—Tax-Season-2018.aspx [Accessed 5 Jun. 2018].