On 24 October 2016, the new Binding General Ruling (BGR) No. 36 relating to the application of section 16(2)(g) of the Value-Added Tax (VAT) Act, was released by the South African Revenue Service (SARS).

A BGR is issued on matters of general interest or importance and clarifies the SARS Commissioner’s application or interpretation of the tax law relating to these matters.

Section 16(2)(g) of the VAT Act deals with alternative documentation which may be used by a vendor in the absence of proper constituted documentation as listed in section 16(2)(a) to 16(2)(f) of said Act (such as a tax invoice, credit note, debit note, the supply of second hand goods, bill of entry in terms of Customs and Excise Act, etc.).

This BGR provides more clarity regarding circumstances under which SARS will allow the use of alternative documentary proof, (therefore not the documents prescribed under section 16(2)(a) to 16(2)(f)), if the vendor –

• has sufficient proof that it made reasonable attempts to obtain the documentary proof required by SARS;
• was unable to obtain and maintain the prescribed documentation due to circumstances beyond the vendor’s control (circumstances beyond the vendors control is dealt with in detail in the BGR);
• no other provision of the VAT Act allows for a deduction based on the particular document in the vendor’s possession.

Furthermore, it is important to note that a deduction under section 16(2)(g) may only be made where the vendor is in possession of the relevant approval granted by SARS, as well as the relevant documents, at the time the return is submitted.

The question arises how a vendor obtains this approval from SARS, i.e. what is the process to follow? SARS provides the following modus operandi:

1. A vendor must apply for a VAT ruling or VAT class ruling under section 41B;
2. A clearly motivated application complying with the provisions of section 79 of the Tax Administration Act (excluding section 79(4)(f), (k) and (6)), must be submitted;
3. The application must be made in writing;
4. The application can be send by e-mail to, or can be faxed to 086 540 9390;
5. The application must demonstrate that the vendor falls under the circumstances prescribed above;
6. The alternative documentary proof the vendor seeks to rely on to support the vendor’s entitlement to make the deduction, must accompany this application.

This BGR applies to tax periods commencing on or after 1 April 2016 until it’s withdrawn, amended or the relevant legislation is amended.

If you have any enquiries, please contact Petri Westraadt at