HomeHome SearchSearch MenuMenu Our productsOur products

What is excluded from notional input tax claims?

by , 27 March 2015
If you claim input tax when you shouldn't SARS will come down on you hard! It will reverse your input tax deductions and slap you with 200% penalties and fines!

While it may be easier to grasp the concepts of what you can claim input tax on when it comes to normal goods, the same can;t be said for second-hand goods.

Today we're going to tell you about all the categories you can't claim notional input tax on.

Read on to find out on what they are so you can avoid SARS' hefty penalties from claiming the wrong thing!


Read on to find out on what you can't claim input tax when it comes to the second-hand goods you buy!

There are six exclusions to the second-hand goods definition:

1. Animals, e.g. you run a dairy farm and decide to buy three cows from neighbouring farmer. You can't claim Vat on these as second-hand goods;

 *********** Recommended For You ***************

The Practical Tax Loose Leaf Service represents 11 years of tradition, prestige and value!

The Practical Tax Loose Leaf Service first published in May 2003!
Last updated: February 2015!

•    Over 500 pages of definitions and legal regulations, useful advice, exceptions to the rules that help you slip through the legislative jungle of taxes.
•    167 Case studies and practical examples that show you what elements you should consider for your taxes to be perfect;
•    83 Red flags you need to watch out for and the penalties you'll face if you don't respect them;
•    Six sample templates at your disposal, ready to be filled in, customised and printed.
 
The Practical Tax Loose Leaf Service is a full service tax consultancy you can use every day!

... Click here for details >>

  ***************************************

2. Gold coins issued by the Reserve Bank (Section 14, South African Reserve Bank Act) e.g. You're a precious metals dealer and buy Kruger Rands from a client in need of cash. These aren't secondhand goods and you can't claim notional input because they were supplied at the zero rate (Section 11(1)(k), Vat Act);

3. Certain mining rights. Let's assume you are a farmer and with a piece of land you buy, comes the right to prospect granted in terms of Section 17 of the Mineral and Petroleum Resources Development Act, 2002.

Pay attention to the fact that the prospecting right isn't second-hand goods and you can't claim notional input tax!

4. Land assistance or land restitution properties, e.g. the Provincial Government buy a piece of land
for settlement of persons or purposes of restitution of property to dispossessed peoples;

5. Any goods that aren't second-hand goods e.g. new goods you buy from a non-vendor;

6. Services; and

7. Trees and plants.

You can't claim notional input tax on these. So don't try.


Related articles




Related articles



Related Products



Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>