Through KPMG’s longstanding involvement in and understanding of the non-life insurance industry, we developed indirect tax specific expertise in the field and regularly provide insurance specific Value-Added Tax (VAT) training, VAT reviews and VAT consulting services to non-life Insurers, Intermediaries and Reinsurers (hereinafter referred to collectively as “the Industry”).
This Manual is intended as a guide on the VAT treatment of non-life insurance and reinsurance. Although the Manual mainly focuses on the VAT implications relevant to the Industry, the basic VAT principles pertaining to life insurance are also addressed.
The Manual endeavours to present the reader with a basic, yet practical understanding on how to apply the mechanics of VAT in the Industry.
This Manual is based on the provisions of the Value-Added Tax Act No. 89 of 1991 (the Act) as at 31 May 2026; Binding General Ruling (BGR) 14 (Issue 3) dated 24 March 2020; BGR 32 dated 18 March 2016 and the relevant Interpretation Notes issued by SARS, which remained in force as at 31 May 2026. Since legislation, Interpretation Notes and other publications issued by SARS, National Treasury and the Minister of Finance change from time-to-time, readers are cautioned that such changes may impact on the content of the Manual.
We also note that following the amendments to section 72 of the VAT Act, SAIA applied for reconfirmation of the section 72 ruling included in paragraphs 2.7.2 and 2.7.3 of BGR 14 (Issue 3) during December 2021, which application was not successful. During discussions, SARS noted certain reservations with regards to the legal nature where goods are replaced or repaired by Insurers. Following various communications between SAIA and SARS, SAIA made a submission to National Treasury to request certain amendments to the VAT Act to address both the VAT treatment of repairs or replacement by Insurers, and to effectively incorporate the former provisions contained in the said paragraphs of BGR 14 (Issue 3). SAIA also submitted additional information to SARS for consideration which SARS, and presumably National Treasury, are in the process of considering. Following the said submission, section 8 of the VAT Act was amended on 22 December 2023, to give effect to the Industry’s requests. These amendments are effective from 1 January 2024.
This Manual shall not be construed as a formal opinion by KPMG on any aspect covered herein, nor shall it be construed as an extension or replacement of any ruling, BGR, Interpretation Note or other document issued by SARS, National Treasury or the Minister of Finance.
