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Don't claim input tax on these six club subscriptions!

by , 12 September 2014
Input tax claims are one of the common triggers of a SARS audit and a magnet for penalties and interest.

The reason most Vat vendors get into trouble is because they claim for wrong items. This includes subscriptions.

You see, when it comes to subscriptions, SARS only allows you to claim input tax on professional subscriptions as long as they relate to your business and its taxable supplies.

You can't cross this line and claim input tax on the following six club subscriptions - you'll be inviting SARS audits and penalties if you do.

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Here are six club subscriptions SARS doesn't allow

  1. Country club memberships;
  1. Subscriptions to a soccer, rugby, cricket or other sports supporters' club;
  1. Amateur sporting associations like boxing governing bodies or gymnastics associations;
  1. Holiday clubs;
  1. Tea clubs; and
  1. Stokvel savings clubs.
If, for example, your business is part of a fast food franchise, you can't claim the input tax you spent on joining the local country club where you play golf and entertain suppliers and business associates.

Remember, all it takes is just one mistake for SARS to deny your input tax claim and slap you with penalties and interest! So don't go overboard AND don't claim input tax on the above six club subscriptions, SARS won't allow it.

PS: If you need more information on input tax claims, checkout the Practical Vat Loose Leaf Service. You'll get information like:

  • The two things you must do to guarantee your input tax claims;
  • Vital facts about input tax claims;
  • The key to smooth input tax claims;
  • Items you can't claim input tax on; and
  • So much more.

In addition to checking out the Practical Vat Loose Leaf Service, our Vat experts are more than happy to answer any of your queries at www.accountingandtaxclub.co.za.

PS. Here are 34 Input tax savings you could be missing out on…

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Don't claim input tax on these six club subscriptions!
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