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SARS Tax Directive
TENET issues two documents each month - a Statement and a Tax Invoice - to each Institution. The Statement includes statements of position regarding TELKOM's services and TENET's management fee, and also includes the invoice details in respect of TELKOM's services, as per the consolidated Tax Invoice issued by TELKOM to TENET. However invoice details for the management fee are shown separately on TENET's Tax Invoice.
8 August 2001
Updated for GEN2: 7 January 2005
The South African Revenue Services (SARS) issued a formal directive,
dated 16 July 2001 and entitled: VALUE-ADDED TAX: DIRECTIVE IN RESPECT
OF THE TERTIARY EDUCATION NETWORK ("TENET") APPOINTED AS AGENT BY
HIGHER EDUCATION INSTITUTES ("HEI"). The directive concerns the issuing
of Statements by TENET for services provided by Telkom. It states that
the Statement issued by TENET is considered to be an acceptable
document on which an input tax deduction by an HEI may be claimed,
subject to certain changes being made to the Statements.
The Directive is in the form of a letter to Johan Benade, of
PricewaterhouseCoopers in Pretoria, through whom the issuing of a
directive was requested. The directive can be downloaded at the bottom
of this page.
Here's why TENET doesn't provide a Tax
Invoice for TELKOM's services
There is a good reason for this, which has to do with TENET's status as
your agent for the procurement of certain services from Telkom.
The principles and procedures are:
(a) As the Agent of the Institutions, TENET may handle the charges from
TELKOM to the Institutions and the payments of these charges, including
VAT, but TENET may not claim the VAT on these charges. VAT on TELKOM's
services is charged by TELKOM - not TENET - and TELKOM is liable for it
to the Receiver. VAT on TELKOM's services to an Institution is paid by
the Institution - not by TENET, and may, where applicable, be claimed
as input VAT by the Institution - not by TENET.
(b) TENET is obliged by law to issue a Tax Invoice in respect of
services charged directly by TENET - i.e. in respect of the Management
Fee.
(c) TELKOM is obliged to issue Tax Invoices in respect of the services
for which it charges the Institutions, but these invoices may be issued
to TENET (as the common Agent of the Institutions) as a single Tax
Invoice document that lists the charges and VAT per Institution.
(d) TENET may issue a Statement, but may not issue a TAX invoice to the
Institutions in respect of TELKOM's services to the Institutions.
Institutions are obliged to pay the full amount to TENET against the
Statement, in accordance with the terms set out in the Agency
Agreement.
(e) Depending upon their individual VAT statuses, Institutions may
claim the input VAT as set out on TENET's Statements.
(f) TENET is obliged to retain the original Tax Invoices from TELKOM in
case of any enquiry.
