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If you claim input tax on these four 'second-hand goods', you could face a SARS audit

by , 31 December 2014
SARS is very strict when it comes to input tax. And it won't let you claim input tax on certain goods.

If you claim on the wrong goods, it will deny your claim.

What's more, it will audit your business because it suspects you want to get money from it illegally.

And that's why you must never claim input tax on these four 'second-hand goods'...

Here are four items you can't claim input tax on

#1: Gold coins from the Reserve Bank
Let's say, you're a precious metals dealer and buy Kruger Rands from a client. You can't claim input tax on these because you got them at the zero-rate.
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You could be missing out on 34 input tax Vat savings...
Are you sure you've claimed input tax on these five office expenses?

  1. Plants for the office;
  2. Flowers sent to sick staff;
  3. Medical bills;
  4. Promotional gifts; and
  5. Stationary orders for the office?
There are 29 other input tax claims you can use to your advantage too...

Find out what they are here and never miss out on another input tax claim again...
#2: Certain mining rights
Let's assume you buy a piece of land and it comes with prospecting rights. You can't claim input tax on these rights.
Note: According to gov.za, a prospecting right is a permit that allows you or your company to survey or investigate an area of land to identify mineral deposits.
#3: Trees and plants
Lastly, you can't claim when you buy plants or trees to put around your office, for instance.
#4: Animals
If, for example, you run a dairy farm and decide to buy three cows from another farmer, you can't claim input tax.
So why does SARS deny these claims?

Here's why SARS won't let you claim input tax on these items

The Practical Vat Loose Leaf Service says all these items don't fit the definition of second-hand goods.
This means Vat rules for buying and claiming input tax on second-hand goods don't apply to them. So while at face value, they seem like second-hand goods, they aren't.
That's why SARS will deny your claim and audit your business if you claim on them. Now that you know about them, don't claim input tax on them.
PS: There's a silver lining. Get your hands on the Input Tax 101 e-Report and you'll discover:
  • 7 Items you can claim input tax on;
  • 9 More items you CAN claim input tax on, but didn't know about;
  • 13 Motor vehicles you can claim input tax on; and
  • So much more!

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If you claim input tax on these four 'second-hand goods', you could face a SARS audit
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