A SARS ruling that Non-executive Directors are required to register and charge VAT where they earn director’s fees exceeding the compulsory VAT registration threshold of R1 million during a 12-month period will likely create a significant administrative burden for non-executive directors and the companies they serve.
The ruling also raises questions about whether SARS will be able to cope with the large number of VAT registration applications that are likely to be submitted over the next three months before the ruling becomes effective.
Many companies are not registered for VAT and will not be able to claim a VAT deduction even though their non-executive directors will charge 14% VAT.
For further information, contact:
Thato Malebane, Marketing & Communications Manager
Tel: (+27) 011 259 4018