Can VAT be levied on penalties in a construction contract?

Source: Supplied</span>When projects in the construction run over their deadline, penalties are imposed at an agreed rate from the contractual stipulated date to the actual date of completion. The agreed rate is meant to represent a genuine pre-estimate of damage that may be suffered as a result of the failure of one of the parties to fulfill its obligations timeously, or at all, and if it is excessive or out of proportion to the prejudice suffered it may be susceptible to relief provided for under the provisions of the Conventional Penalties Act, Act 15 of 1962.
Read more... | Send to a friend