Tax authority guidance on VAT accounting for insurance premiums

The South African Revenue Service (SARS) has clarified the VAT accounting treatment of certain insurance transactions including premiums collected by intermediaries on behalf of an insurer. Where a premium is collected by an intermediary on behalf of an insurer, the insurer must account for VAT in the tax period in which the premium is received from the intermediary. Usually under the Short-Term Insurance Act, the premiums are payable to the insurer within 15 days of month end.