VAT Treatment of Supplies Made: Agent Status and Burden of Proof

• The case involves a dispute between KEN CC and SARS regarding the VAT treatment of services provided to foreign tour operators.
• KEN argues that the services it provides are zero-rated under the VAT Act because the FTO customers are not residents of South Africa and the services are rendered outside of South Africa.
• KEN considers itself an agent on behalf of the FTOs and not responsible for the VAT implications of the local services provided by third-party service providers.
• SARS argues that KEN acquired the local services as principal and on-supplied them to the FTO customers, making the commission earned by KEN subject to VAT at the standard rate.
• Evidence shows that KEN secured bookings and processed payments on behalf of the FTOs, but the FTOs selected the suppliers and instructed KEN to book with them.
• KEN represented itself as an agent for the FTOs, and all local service providers were aware of this.
• The commission earned by KEN was not disclosed in its quotations and invoices to the FTO customers.

Source: ensafrica.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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