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Know when you can claim input tax so you don't incur penalties

by , 13 October 2014
As a Vat vendor, you can claim input tax. But you need to know when to do this so you don't incur SARS penalties.

After all, if you claim input tax when you're not entitled to it, SARS will reject the claim and charge you penalties and interest for the mistake.

To help you avoid this, we're revealing when you can claim input tax so SARS doesn't add extra charges to your Vat bill...

 

Don't know when you can claim input tax? Let us tell you

 
You can claim input tax credits on any expenses you incur to make taxable supplies except under certain, specific circumstances. Examples of these 'specific circumstances' are when you buy a company car or use the money for entertainment.
 
But as a vendor, you can claim back the Vat you pay on things like your:
 
• Telephone account;
• Stationery;
• Professional subscriptions;
• Fixed assets;
• Trading stock; and
• Fixed property.
 
You can find a list of other expenses you can claim input tax on in the Practical Vat Loose Leaf Service.
 
Here's what you need to do to claim input tax when you incur these expenses.
 
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Get practical advice to claim every input tax credit available to you and get the maximum benefit from the Vat system!

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You need to do this so you can claim back input tax

 
To claim the input tax on these expenses back, you need to get a tax invoice from the supplier when the transaction happened. 
 
For example, if you buy raw metal to make your products, you can claim back the input tax on these supplies. But you need to get a tax invoice from your supplier first. 
 
Only when you incur an expense to make taxable supplies for your business AND you have a tax invoice can you claim input tax.
 
For more information on how to claim input tax, check out Input Tax 101. It has everything you need to know to get your money back from SARS.
 


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