Binding General Rulings (BGR) 28. (VAT Act): Specific Requirements Relating to Credit and Debit Notes, Exchange Rates, and Advertised or Quoted Prices for the supply of electronic services

10 February 2023

Binding General Ruling 28 relates to the VAT Act and sets out:

  • information to include on a credit or debit note to satisfy the requirements of section 21(5) of the VAT Act
  • exchange rate that must be applied to determine the amount of the VAT charged in Rands, and
  • What prices to be included which prices must be advertised or quoted – for the supply of electronic services by an electronic services supplier.

What is a Binding General Ruling?

Binding General Rulings (BGRs) are a type of official interpretation of tax laws in South Africa. They are issued by the Commissioner of the South African Revenue Service (SARS) and have the force of law. BGRs are issued to provide clarity on how the tax laws apply to specific transactions or situations.

BGRs are binding on SARS, taxpayers, and tax practitioners, and can be relied on as authoritative interpretations of the tax law. They provide certainty and consistency in the application of tax laws, and can help to reduce disputes and litigation.

BGRs are generally issued in response to a request from a taxpayer, tax practitioner, or industry association, although SARS can also issue BGRs on its own initiative. The process of issuing a BGR involves consultation with stakeholders and the publication of a draft ruling for public comment.

Once a BGR is issued, it is published on the SARS website and included in the SARS Interpretation Notes. If a taxpayer follows a BGR in good faith, SARS cannot later challenge that interpretation of the tax law, unless there has been a change in the law or material facts.

Overall, BGRs are an important tool for promoting consistency and certainty in the application of tax laws in South Africa. They provide taxpayers with guidance on how to comply with the law, and can help to reduce the risk of disputes and litigation.

You can read the BGR 28 here.

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