The South African Revenue Service has announced that temporary measures have been put in place to deal with the tax aspects of the next soccer World Cup, which South Africa is hosting in 2010.
Under the measures, FIFA, the sport’s world governing body, and qualifying groups or persons affiliated to FIFA, are allowed to import certain goods, consume or sell them without paying any duties or levies. In this regard, a specific rebate item has been developed and published and the necessary systems changed.
These measures also apply to the Confederations Cup, a smaller tournament which is currently being staged in South Africa as a ‘dress rehearsal’ for next year’s main event.
Qualifying groups or persons affiliated to FIFA, under certain conditions, will be exempted from paying VAT. In this regard, a special form has been developed to be used for VAT registrations for those participating in both the Confederations Cup and for the 2010 FIFA Soccer World Cup. Standard operating procedures and policies have been developed in support of these changes, SARS said.
All the laws relating to the Soccer World Cup have been gazetted and the Revenue Laws Amendment Act has been updated.
Guarantees issued in 2006 gave effect to the signing of the Memorandum of Understanding between SARS, the National Treasury and FIFA. Since then, a number of rulings have been made across various taxes to give effect to SARS meeting the requirements of the guarantees.
Non-qualifying persons or groups such as visitors, fans, tourists or any persons or groups with no contractual obligations with FIFA, will be subject to existing customs procedures and processes.
All VAT registrations, refund claims by FIFA subsidiaries relating to the Confederations Cup and 2010 World Cup will be facilitated via a single FIFA entity. FIFA will submit one VAT refund claim to SARS on behalf of all its subsidiaries and will distribute claims to its subsidiaries upon receipt of payment from SARS.
All FIFA VAT registrations related to the Confederations Cup and 2010 World Cup have been backdated to April 2006 as the effective date of signing of the various agreements related to hosting of the soccer tournament. Registrations will expire two years and one month after the 2010 FIFA World Cup.
SARS said that a dedicated unit for the resolution of queries relating to the Confederations Cup and 2010 World Cup would be set up by June 19.
The Revenue Service suggested that the Confederations Cup, which runs from June 14 to 28, will provide a “test” for these changes and lessons will be learned before the 2010 World Cup is hosted.
“The SARS 2010 Project Team will meet to evaluate the effectiveness of these new policies and procedures after the Confederations Cup,” SARS stated. “These will be used as lessons learnt to inform SARS of the finer requirements for 2010 FWC South Africa.”
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