Hello Sage City Community Members 

At Sage our vision is to help businesses streamline their operations through automation, ensuring seamless adherence to tax regulations and actively combatting widespread VAT fraud and avoidance prevalent in the gold trade.

To this end, from September 2023, we have added functionality to Sage Business Cloud Accounting software that makes it simple for small and medium enterprises (SMEs) to comply with domestic reverse charge (DRC) regulations (as published by the National Treasury) for VAT on valuable metal. 

With DRC VAT, the recipient (a VAT-registered customer) in a valuable metal transaction must report and pay the VAT on the sale to the South African Revenue Service (SARS). The recipient can only claim an input VAT deduction for the transaction if it has declared and paid the tax in its VAT 201 return. The regulations apply to VAT-registered companies on all supplies of valuable metal.

This means that:

• The responsibility to account for, and pay the VAT charged by the supplier on a transaction involving valuable metal will shift from the supplier to the recipient.
• The recipient will be entitled to an input tax deduction only if the VAT amount levied by the supplier has been declared and paid in the recipient’s VAT 201 return.
• Supplier invoices must indicate the VAT DRC value payable by the recipient. Corresponding Debit and Credit notes will share the same detail.
• The recipient will have to issue VAT DRC statements to the supplier indicating VAT DRC paid over on behalf of the supplier.

Automating compliance requirements around valuable metal DRC will save time for SMEs operating in this segment, making it faster and easier for them to file accurate submissions and furthermore reduce malpractice against the SARS.

 Please watch our How To Guide 

Our continued focus on finding ways to help our customers and accountants automate more manual processes allows them to spend more time growing their businesses.