Minimise Your Vat and Increase Your Input Tax Claims

 

“Vat...Every businessman’s worst tax nightmare”

But here’s how to get rid of your Vat problems once and for all!

Your comprehensive guide to for managers and business owners claiming Vat on second hand or repossessed goods


An important provision to the Vat Act concerns the claiming of Vat on second hand goods or repossessed goods.

You must complete a Vat264 form, to assist you to comply with the provisions pertaining to the acquisition of second hand goods (Section 20(8) of the Vat Act).

Since 1 May 2004, all vendors claiming an input tax credit for the acquisition of second-hand goods or repossessed goods are now required to complete the Vat264 form and retain this form for five years after completion of the transaction (Section 55 of the Vat Act).

Did you know you can download the Vat264 form from SARS website (www.sars.gov.za) under Vat/Vat Forms?

Throughout the handbook, we will highlight some of the most important websites and where exactly you can download valuable material you can use right away.

Try our complete Tax Advisory Service risk-free for 14-days. As part of this service you’ll receive the Practical Tax Loose Leaf Service, three Bonus Reports, Regular updates, the Weekly Tax Bulletin, Online access to past Tax Updates and a Tax Helpdesk.

What you’ll discover in the Practical Tax Loose Leaf. Order today!

  • Key Vat deadlines you MUST meet
  • Duties of a representative vendor
  • Hassle-free tax advice: From bookkeeping to the annual statement of accounts
  • Avoiding costly errors when completing your VAT201
  • How to avoid a Vat audit
  • In each update: The most important new judgments and administration decisions in brief and what they mean to you and your business
  • Information on tax tables, banking, exchange controls, insurance, invoicing, immovable property, taxation of foreign operations and much more…

Save by informing SARS of any change in your Vat status. You are obliged to inform the SARS in writing of any change:

  • In the name, address, constitution or nature of your principal enterprise.
  • In the name of and address at which your enterprise is carried on.
  • Where your turnover exceeds R30 million per annum.
  • Should your turnover as a vendor on the payments basis (page V 01/017 of the Practical Tax Loose Leaf) exceed R2.5 million per annum? This payments basis is not applicable to trusts,CCs and companies.
  • In the composition of the membership of your partnership or joint venture. You are not required to notify the SARS of any change in the share - holding of your company (Section 25).
  • In the appointment or resignation of a representative vendor. You have to inform the SARS within 21 days of such a change. Failure to notify the Receiver of any of the above changes is an offence, and if found guilty you could be fined or imprisoned for a period not exceeding 24 months (Section 58).

TIP

You must submit monthly Vat returns once your turnover exceeds R30 million or is expected to exceed that amount. Don’t wait until SARS changes your status or sends you a monthly Vat return. SARS may hold you liable for penalties if you fail to do so. SARS has issued many assessments in excess of R1 million to medium-sized companies with a turnover greater than R30 million in cases where they failed to submit monthly Vat returns (Section 25 (b)).

Follow the link to order your copy


Are subscriptions subject to Vat?

Question:

Are subscriptions paid by members of a country club subject to Vat? The club is registered as a Section 21.

Answer:

Section 21 (not for profit organisations) aren't obliged to register for Vat for the income collected to defray costs incurred for the common cause (levies etc), but they must register for activities generating income in excess of R1 million, where the activity is deemed to be “carrying on an enterprise”.

If income from “an enterprise” is less than R1 million the registration is voluntary. If the section 21 entity is not registered as a vendor then input tax will not be claimable. If the entity you refer to is potentially involved in an “Enterprise” activity where turnover exceeds R1 million, for example, if it had a bar and a restaurant, it would then be obliged to register and all revenue would be subject to Vat and in turn input tax will be claimable by the entity.