04/06/2026
Publication of the draft amendments to the regulations on the domestic reverse charge relating to valuable metal
SECTION 74(2) OF THE VALUE-ADDED TAX ACT, 1991 (ACT NO. 89 OF 1991)
The National Treasury and the South African Revenue Service (SARS) published, for public comment, the draft amendments to the Regulations on the Domestic Reverse Charge (DRC) relating to valuable metal, issued in terms of section 74(2) of the Value-Added Tax Act, 1991 (Act no. 89 of 1991) (the Draft DRC Regulations) as well as the Draft Explanatory Memorandum (the Draft EM).
The purpose of these proposed amendments is to enhance the efficacy of the VAT legislation on valuable metal transactions by clarifying the definition of “residue” and the 1% gold content rule (the de minimis rule).
National Treasury and SARS invite comments in writing on the draft regulations by close of business on 30 June 2026.
The Domestic Reverse Charge (DRC) is an anti-abuse measure implemented by SARS to curb VAT refund fraud in the precious metals industry. Under the DRC, the liability to account for and pay VAT on the supply of valuable metals shifts from the supplier to the recipient (buyer).
BACKGROUND
On 8 June 2022, the government gazetted the regulations on domestic reverse charge relating to valuable metal (“the DRC Regulations”), issued in terms of section 74(2) of the Value-Added Tax Act, 1991 (Act 89 of 1991) (“the VAT Act”), which was effective from 1 July 2022. The aim of the DRC Regulations was to foreclose schemes and malpractices to claim undue VAT refunds from SARS by vendors operating in the value chain relating to high-risk goods containing gold. The government introduced further amendments to the DRC Regulations effective 01
https://fincor.co.za/publication-of-the-draft-amendments-to-the-regulations-on-the-domestic-reverse-charge-relating-to-valuable-metal/
