I want to share some interesting Value added tax (VAT) principles that people tend to overlook.
1. Deemed VAT on goods
One may claim deemed input VAT on second hand goods, as if VAT is included. You will need the individual or company's address. In case of an individual you will need a copy of his/her ID document. In case of a company, the registration number.
Two golden rules:
* There must be a payment for the goods.
* The amount claimed must be the maximum of the market value or actual payment.
* You would also need to complete a spesific form from SARS.
2. Input VAT that may be claimed on date on VAT registration.
Any stock (cost of sales) on hand on date of registration for VAT may be claimed in the first VAT 201 return to be submitted.
Reason for this is that on sale of that items or services you will charge VAT on your invoice. This output VAT will be paid to SARS.
The same can be done for capital asset, for example certain vehicles (see below) and machinery, on hand on date of registration.
3. Capital input VAT on vehicles.
The following vehicles maybe claimed for input VAT.
* Single or club cab bakkie
* Panel van - must be a panel van when bought
* Truck above 3500 kg / 3.5 t
In the following instances motor vehicles may be claimed for VAT
* The business is a car dealership the motor vehicles is deemed to be stock and can be claimed.
* The main business is to rent out motor vehicles.
Even though a motor vehicle may not be claimed for VAT, expenses for maintenance, repairs, insurance etc may be claimed.