From 1 January 2026, National Treasury, through the Taxation Laws Amendment Bill, amended section 12 of the VAT Act, dealing with exempt supplies made by public and private schools. As a result SARS require all schools that are registered for VAT to immediately be deregistered and consider themselves, in terms of section 8 of the VAT Act, to have entered into a deemed disposal of all goods that form part of the VATable enterprise.
The implication is the following:
- Immediate deregistration as a VAT vendor
- A VAT output liability will be incurred and be settled
- No more input VAT may be claimed on expenses going forward
- Identify and unpack the amended sections of the VAT Act affecting schools
- Explore what types of supplies are to be included in the deemed VAT-output liability calculation and how the calculation is to be performed
- Confirm when the exit-VAT output liability is to be paid and relief granted by SARS
- Discuss SARS’ FAQ and the practical / financial hardships to be faced by schools
Financial accountants of public and private schools
Auditors of public and private schools
