Going concern sales and the seller’s risk

The legislation governing the zero rate for going concern sales are set out in section 11(1)(e) of the Value-Added Tax Act, No. 89 of 1991 (“the VAT Act”). In addition, SARS in their Interpretation Note 31, prescribes the documents that seller must be in possession of to place reliance on the zero rate for the sale of a going concern. All too often we have seen sale agreements where assets are ostensibly sold as a going concern and parties incorrectly rely on the zero rate or do not have the required supporting documents. The question then always is, what are...