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INPUT TAX: ARE YOU CLAIMING ALL YOU SHOULD BE:

INPUT TAX: ARE YOU CLAIMING ALL YOU SHOULD BE:

Author: Natalie Wocke
Date: 2014-06-13
Last week we looked at vat registration, and obtained an overview of who may be liable to register as a vendor. This week, we look at vat input, to determine if you are claiming all you are entitled to - some of which you may not be aware of.

Notional Input tax on Second hand goods:

When a registered vat vendor purchases second hand goods in the RSA, from an RSA resident non-vendor, which goods will be used wholly or partially to make taxable supplies, the vendor may claim a "notional input tax" on the items purchased, with a few exceptions. Second hand goods are defined as: Goods previously owned and used, but specifically excluding animals.

Generally, the input that may be claimed is the tax fraction multiplied by the lesser of the open market value, or the consideration paid. Notional input may ordinarily only be claimed to the extent that payment for the purchase has been made, with a few special rules relating to fixed property. Where the goods are to be applied only partially to make taxable supplies, a pro-rate portion of the notional input may still be claimable.

A vendor who claims this notional input tax must take heed of the record maintenance requirements, which although uncomplicated, must be complied with.

Practically, this means if a vendor purchases second hand office furniture or a second hand delivery vehicle from a non-vendor, as long as you comply with all the requirements, and even though the supplier is a non-vendor, input can more often than not , still be claimed.

For an assessment to determine whether assets or property you intend acquiring, to be used in the course of making taxable supplies, will qualify for an input tax deduction, call Roberts and Chaplin on 032-586 0387(Ballito) or 947 1010 (Umhlali).