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News & Press: 2018 News Items

Retention payments and VAT

Monday, 04 June 2018  
Posted by: Bert vd Heever
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EduTech has received a number of queries regarding the recent change in the VAT rate.

We wish to refer you to our article published in mid-March entitled "A practical approach to the VAT rate increase to 15% on 1 April 2018"

In that article we stated that: "For projects where retention is applicable. The amount of retention held (excluding VAT) as at the 31st March 2018 must be accurately recorded. This amount will attract 14% VAT when released. All retention (excluding VAT) accumulated and held thereafter, will attract 15% VAT when released."

Some contractors have challenged this interpretation but it is one that KPMG confirms in a more recent article: South Africa: Retention payments and VAT.