Brandy and Coke is without a doubt the most popular and most South African drink there is. Even the most refined Sauvignon sipping snob will seriously contemplate going over to the dark side after his third glass of wine.
Excessive Brannas and Coke consumption either turns you into a lover, a fighter, or a combination of aforementioned.
I turn into a lover, then a beggar and finally a whiner – you see Brannas and Coke turns my wife into a fighter even though she doesn’t drink anything at all.
The lover/fighter combination is usually something spectacular to behold. I have seen Brannas and Coke fuelled full grown men first trying to bliksem each other to within inches of death only to then make loving peace in a way that resembles a scene from Brokeback Mountain.
All this calamity happens because Brandy and Coke is a contradiction in a glass. The alcohol makes you want to go to sleep while the caffeine overrides the drowsiness.
It also creates a high similar to being on heroin as Brandy and Coke act on the same pleasure centres of the brain as heroin does – this apparently makes you want to drink more.
The carbon dioxide in carbonated drinks increases the pressure in your stomach, forcing the alcohol out through the lining of your stomach into the bloodstream – making you do ridiculous things far quicker than anticipated.
Unfortunately the Government seems to have caught up with us Brandy and Coke connoisseurs. Sugar tax will be collected from 1 April 2018. Excise duties will increase by between 6% and 10% and it is expected that this will bring an additional R1.33bn in revenue in the 2018/2019 financial year.
Other non-related Brandy and Coke changes include donations tax increasing to 25% for all donations exceeding R30m and estate duty increasing to 25% for all estates exceeding R30m.
The biggest change is undoubtedly VAT increasing to 15% effective 1 April 2018. This raised numerous nervous questions, especially from property developers, regarding what rate would be applicable to certain transactions.
The general time of supply rules are governed by section 9 of the VAT Act. We all know the golden rule, earlier of payment or invoice. Section 67A of the VAT act deals with an increase in the tax rate and contains anti-avoidance rules which override section 9. In a nutshell, where goods are supplied or services rendered before the 1st of April 2018, the rate of 14% will be applicable, irrespective of the fact that the invoice may be issued or payment received after the effective date. In cases where the time of supply has been triggered under section 9 (for example by issuing an invoice), but goods or services are only delivered 21 days after the 1st of April, those supplies will be deemed to have taken place on 1 April 2018 and will attract VAT at 15%.
The sale of residential property is specifically addressed under section 67A. The time of supply rule under section 9 (3)(d) includes the supply in the period where transfer is effected to the purchaser, or payment of the consideration has been received, whichever is earlier. Under these rules, if the purchase consideration remains outstanding on 1 April 2018 and transfer has not been effected, the time of supply would fall after the effective date, and the transaction would attract VAT at 15%. Fortunately section 67A provides relief, deeming the time of supply to be the date a written agreement is concluded between seller and purchaser. If the sale contract is concluded before the 1st of April 2018, a tax rate of 14% will be applicable, irrespective of date of payment or transfer. This relief extends to agreements concluded for the construction of residential property by any vendor carrying on a construction enterprise.
For the sale of commercial property, no relief is granted under section 67A. Fortunately, suppliers will have recourse to recover the increased VAT from the purchaser under section 67 of the VAT Act, unless the agreement specifically stipulates otherwise. It must be noted, that the supplier will remain liable to pay VAT at 15% to revenue services, irrespective of its success in recovering the additional VAT from the purchaser.
We South Africans are a resilient bunch. We will overcome any adversity. Even the increase in the price of Brandy and Coke.
Article by C2M Director, Carel Steenkamp CA (SA) RA. For more information email email@example.com.
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