Nonexecutive directors could face onerous obligations after the South African Revenue Service (SARS) ruling that they need to register for value-added tax (VAT) before June 1 2017, some analysts say. There are 2,248 nonexecutive directors in SA, most of whom earn more than the annual R1m threshold for registration of an enterprise under the VAT Act. "Many may decide it is not worth their while to serve," said PwC VAT partner Charles de Wet. He described the new regulations as problematic. "It is quite a process to register for VAT and will place extensive and continuing administrative rules and regulations on nonexecutive directors," said De Wet. This includes paying over VAT every two months and keeping records of all costs that may be deducted as input VAT from output payments. Cliffe Dekker Hofmeyr VAT specialist Jerome Brink said SARS had clarified the status of nonexecutive directors as "independent contractors". All would be required to register for VAT. "However, nonexecutive...

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