also sprach Allison Randal <allison@lohutok.net> [2015-07-02 23:58 +0200]: > - DC16(Pty)Ltd will register for VAT, and pay 14% VAT on all > sponsorships it receives from local companies. … and charge that VAT on to the compnay, obviously, and be explicit about that in the brochure. E.g. Bronze @ 28,000 will hence cost the sponsor 31,920, of which we'll owe 3,920 to SARS. > - The vast majority of DC16(Pty)Ltd's income will come from SPI (a > US-based non-profit). These funds will be transfered into > DC16(Pty)Ltd's bank account, and DC16(Pty)Ltd will then pay the > university, caterers, bus rental companies, venue for conference > dinner, travel companies for the Day Trip, etc. An alternative is *not* to channel all this through DC16(Pty)Ltd, but for SPI to be the contractual partner with bus rental companies, conf dinner venue, etc.. This is what we're doing for DC15, but mainly since the German entity (a tax-exempt non-profit) cannot really gratuitously pay for booze of people without its tax status being scrutinised. Yes, this will mean that we'll have a few payments >R10k coming in to the country, but I believe this isn't actually going to break our necks. The plan Allison mentioned (DC16 invoices SPI) will IMHO almost certainly not work as the service provided by DC16 to SPI (for which it invoices) is (a) "delivered" in ZA, and (b) I'd be surprised if it weren't VA-taxable. > - At the close of each tax year while DC16(Pty)Ltd exists, it will > pay corporate income tax on any profits remaining. Profits are > income from SPI and local sponsors, minus any amounts paid to the > university, caterers, bus rental companies, venue for conference > dinner, travel companies for the Day Trip, etc. We expect profits > to be near zero. (Verify that this is a reasonable expectation, > and that all of those categories of expenses reduce our "taxable > turnover".) Yes, we can certainly engineer for this, given enough time. If DC16(Pty)Ltd will not have enough cash at the time of venue downpayment, then a transfer by SPI will be required, which we'll book as a liability and can pay off at the end of the year to anull all profits. > - Final question: is there anything else they recommend we > consider related to incorporation, taxation, or business > operation? What will be our main expense, and what's the VAT situation for that? Is it all payable at a fixed rate of 14%? Or is university housing maybe even exempt? If so, maybe there's a way to opt for a simplified VAT scheme (like there is in Germany) where you charge VAT to your customers, but you don't claim it from your suppliers. Instead, you pay the suppliers and get to deduct a flat percentage against all taxable turnover. As we don't pay any VAT on the hostel for DC15, we opted for this flat model, as it effectively means we can claim 7% against all Euros spent on the hostel, even though they don't charge it to us. Profit! ;) -- .''`. martin f. krafft <madduck@d.o> @martinkrafft : :' : proud Debian developer `. `'` http://people.debian.org/~madduck `- Debian - when you have better things to do than fixing systems there are lies, statistics, and benchmarks.
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