VAT Guide to Value Added Tax - sri lanka inland revenue ...

ii.
iii.
any other registration that may have been obtained by an individual co-owner or
some of the co-owners because a co-ownership is defined as a ‘person’ for VAT
purposes under Sec. 83 of the Act.
If the identical co-owners are renting several properties all such rents should be
considered under one-registration (and they should be amalgamated for the
purpose of calculating the threshold) even if the share of rent may be different
from different properties in terms of the title to the properties. It is like several
partnerships carried on by identical partners while the profit sharing ratio is
different in different partnerships The reason is VAT is chargeable by a
Registered Person" ”and not by a "Taxable Activity". (Vide Para 4.12).
An individual co-owner’s rental income which he receives on his own form a
different property will not be amalgamated with his share of rent from the coownership
if the co-ownership is liable to be registered separately; However if
the co-ownership’s rental income is below the threshold and is not registered for
VAT then for the purpose of calculating the threshold, the individual co-owners
share of rent will be amalgamated with his “value of supplies’ from other ‘taxable
supplies’ which he may be supplying.
24.14. Entrance fees of a club
The definition of taxable activity in the case of a club includes only (i) receipts of
subscriptions and (ii) provision of facilities to its members and others for a consideration.
Thus “entrance fees” appear to be outside the scope of taxable activity. However in
terms of item (xx) of Schedule 2 to the VAT Act subscription can be constructed to mean
membership fees and similar charges. Thus.
“if the entrance fees is similar to membership fees in the sense that it entitles a
members to continue as a member or to other benefits enjoyed by a member
such as voting rights etc., or if it is charged in consideration of other facilities
offered by the club or the payment of entrance fees makes the person entitles to
other facilities then entrance fees is treated as subscription or a charge similar to
membership fees and is subject to VAT at 10%.
The rules and regulations and or the constitution of the club will enable this to be
determined. In case the entrance fees is not a charge similar to membership fees which
can be subject to VAT, the input credit attributable to that part of the receipts will be
disallowed (Any claim should be forwarded to file VAT/Gen/18)
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