--- title: Be certain of your VAT status - Wiltons description: On 25 May 2021, the Supreme Court of Appeal (SCA) upheld an appeal by the Commissioner for the South African Revenue Services (“SARS”) against Tourvest Financial Services (Pty) Ltd (“Tourvest”), a licensed dealer in foreign exchange, concerning its value-added tax (“VAT”) liability. The judgement sets very clear guidelines on when apportionment for VAT inputs must be made, where vendors produce both taxable and exempt supplies. ... 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Search # Be certain of your VAT status 1 Jul 2021 [Wiltons](https://wiltons.co.za/news-desk/author/wiltons) ![](https://wiltons.co.za/hubfs/Imported_Blog_Media/wiltons_article_feature_image10.jpg) On 25 May 2021, the Supreme Court of Appeal (SCA) upheld an appeal by the Commissioner for the South African Revenue Services (“SARS”) against Tourvest Financial Services (Pty) Ltd (“Tourvest”), a licensed dealer in foreign exchange, concerning its value-added tax (“VAT”) liability. The judgement sets very clear guidelines on when apportionment for VAT inputs must be made, where vendors produce both taxable and exempt supplies. The question before the SCA was whether Tourvest, in conducting its enterprise of the exchange of currency through its branch network, made both taxable and exempt supplies (as SARS contended) or whether it only made taxable supplies (as Tourvest contended).   Tourvest’s business consists of 52 branches countrywide and a head office, with a centralised treasury division that procures stock of foreign currency and sets the exchange (buy and sell) rate at which the branches may transact with customers. Tourvest offers to sell foreign currency to the public at a rate in excess of the rate at which it acquires that currency and offers to buy foreign currency at a rate that is lower than the price at which it expects to sell that currency. It also charges a commission, based on a percentage of the transaction value. VAT is levied on the commission.   Previously, Tourvest applied an apportionment in terms of section 17(1) of the Value-Added Tax Act 89 of 1991 (“the VAT Act”). However, Tourvest changed its stance in 2013 and took the view that the goods and services obtained for their branches were used by it wholly in the course of making taxable supplies and not at all in the course of making exempt supplies.   Accordingly, Tourvest concluded that no apportionment was required.   Tourvest contended that it had overpaid VAT in each tax period over the prior five years and claimed an input tax deduction of R24 million in the September 2013 tax period, which was paid by SARS. Following an audit, SARS issued an additional assessment adding back the refunded amount, on the basis that the goods and services had been acquired by Tourvest for use in the course of making both taxable and exempt supplies and accordingly an apportionment of input tax was necessary.   The SCA found that what would otherwise have been an exempt financial service was to an extent treated as a taxable supply (so that the commission carried VAT). This did not mean that the activity lost its exempt nature entirely. It remained an exempt supply for all other purposes, while the taxable component carried VAT. It followed that the relevant *proviso* in the VAT Act created a mixed supply out of an identified activity, rather than causing the activity to lose its exempt status in its entirety.   The SCA further held that the effect of the *proviso* in the present context was merely to add a taxable element to what was, and at its core remained, an exempt financial service. It turned the activity into a partly exempt and a partly taxable supply. ### Share: [Share on Facebook](http://www.facebook.com/share.php?u=https://wiltons.co.za/news-desk/tax/be-certain-of-your-vat-status&utm_medium=social&utm_source=facebook) [Share on LinkedIn](http://www.linkedin.com/shareArticle?mini=true&url=https://wiltons.co.za/news-desk/tax/be-certain-of-your-vat-status&utm_medium=social&utm_source=linkedin) [Share on Twitter](https://twitter.com/intent/tweet?original_referer=https://wiltons.co.za/news-desk/tax/be-certain-of-your-vat-status&utm_medium=social&utm_source=twitter&url=https://wiltons.co.za/news-desk/tax/be-certain-of-your-vat-status&utm_medium=social&utm_source=twitter&source=tweetbutton&text=Be%20certain%20of%20your%20VAT%20status) ## Wiltons ## Comments ## Related posts Search [Nuisance: the requirements, remedies and defences](https://wiltons.co.za/news-desk/law/nuisance-the-requirements-remedies-and-defences) [The Low-down on Property Auctions](https://wiltons.co.za/news-desk/property/the-low-down-on-property-auctions) Search ![Group 39809](https://wiltons.co.za/hubfs/Group%2039809.svg "Group 39809") Accounting for people.   ##### Quick Links - [Home](https://wiltons.co.za) - [Who We Are](https://wiltons.co.za/about) - [Services](https://wiltons.co.za/services) - [Social Investment](https://wiltons.co.za/social-investment) - [Contact](https://wiltons.co.za/contact) ##### Resources - [News](https://wiltons.co.za/news-desk) - [Tax Guides](https://wiltons.co.za/hubfs/Wiltons-Tax-Guide-2021-2022.pdf) - [Company Profiles](https://wiltons.co.za/hubfs/Wiltons-company-profile-2021_Zambia_Web.pdf) - [Privacy Policy](https://wiltons.co.za/privacy-policy) ##### Find Us Here - **South Africa** - 9 Kinross Street, Germiston South 1401 Gauteng, South Africa - +27 11 873 0234 - support@wiltons.co.za - **Zambia** - 2617/M, Leopards Hill, Lusaka, Zambia - +260 966 771702 - support@wiltons.co.za Copyright © 2026 wiltons. | All Rights Reserved [Follow us on Facebook](https://m.facebook.com/people/Wiltons/100063557949945/?locale=ms_MY) [Connect on LinkedIn](https://www.linkedin.com/company/wk-wiltons/?originalSubdomain=za) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Wiltons", "url" : "https://wiltons.co.za/news-desk/author/wiltons" }, "dateModified" : "2024-02-21T11:48:55.981Z", "datePublished" : "2021-07-01T19:58:58.000Z", "headline" : "Be certain of your VAT status - Wiltons", "image" : [ "https://wiltons.co.za/hubfs/Imported_Blog_Media/wiltons_article_feature_image10.jpg" ], "mainEntityOfPage" : { "@id" : "https://wiltons.co.za/news-desk/tax/be-certain-of-your-vat-status", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://wiltons.co.za/hubfs/Group%2039809.svg" } } } ```