Banking and finance law is a highly sought after area

Law is a highly sought-after area of law with financial sectors worldwide

Exempt supplies are supplies of goods or services where VAT is not chargeable at either the standard rate or the zero rate and will not form part of taxable turnover. If a person makes only exempt supplies, that person cannot register as a vendor or charge VAT on those supplies. Accordingly, any VAT incurred to make exempt supplies may not be deducted as input VAT.


Robert Downey, Jr.

Case Category:

Banking and Finance

Time Frame:

60 Days




Some examples of exempt supplies include:

  • financial services (such as, interest earned for the provision of credit, life insurance, the services of benefit funds such as medical schemes, provident, pension and retirement annuity funds);
  • donated goods or services sold by non-profit bodies (such as, religious and welfare organisations);
  • residential accommodation in a dwelling (but not holiday accommodation);
  • passenger transport in South Africa by taxi, bus, or train;
  • educational services provided by recognised educational institutions such as, primary and secondary schools, technical colleges, or universities which have been approved as public benefit organisations; and
  • childcare services provided at crèches and after-school care centres.
Note that generally the liability to register for VAT does not depend on the status of the organisation itself, but rather on the type of supplies made. There is, however, an exception, which is applied in the case of public authorities.