Four Vat claims municipalities can make to save thousands on their tax bill
If you work for a municipality and are in charge of Vat, make sure you save your municipality some money by claiming input tax on these four expenses...
If you thought it's only businesses who can claim input tax, you're wrong. Municipalities are also allowed to claim Vat for certain transactions.
So if you handle your municipality's Vat affairs, be sure to claim Vat for these expenses.
Save your municipality some money by claiming Vat on these four transactions
You can claim Vat for goods or services where Vat was charged at 14%. For example if you bought stationery for the water supply division and Vat was charged by your supplier;
You're allowed to claim for Vat paid to Customs on for imported goods, says the Practical Vat Loose Leaf Service. For example, your municipality imports electricity cables and paid Vat at Customs. You're allowed to claim the Vat back as input tax;
You can claim for second-hand goods you've bought. For example, if you bought second-hand bricks from a non-registered person for a township development. You can then claim notional input tax on the price of bricks by using this calculation: purchase price x 14/114 = notional input tax;
You're allowed to claim for fixed property. You can claim if, for example, you bought an office block for the refuse collection division.
Remember, if you want to claim Vat, you must have a valid tax invoice.
Knowing the four Vat claims you're allowed to make will help ensure you get some money back for your municipality.