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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;

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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.

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