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Stick to these eight input tax rules so SARS never rejects your claim again

by , 27 January 2015
Claiming input tax is one of the best ways to improve your cash flow as a Vat vendor. The problem is, SARS rejects a lot more input tax claims than it should.

The reason?

Many Vat vendors don't know, or simply don't follow, the input tax rules of input tax and it ends up costing them valuable cash.

Don't let this happen to your business!

Stick to these eight input tax rules so SARS never rejects your claim...

SARS will never reject your input tax claim again if you stick to these eight input tax rules

 
Input tax general rule #1:
You must have a valid tax invoice!
 
Input tax general rule #2:
You can claim input tax on any item you purchase or any expense you have, as long as you use it in the course of your Vat registered business. Obviously your supplier must charge Vat on the transaction.
 
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Input tax general rule #3:
You can claim input tax on second-hand goods you buy for your business. This is notional input tax. But you must keep a record of the details of the person who sold the goods to you. You also need a description of the goods and the amount you paid for them. In this case, the VAT 264 declaration takes the place of your tax invoice.
 
Input tax general rule #4:
But there are certain expenses and purchases you can NEVER claim input tax on. SARS will deny the input tax up front and charge you with penalties! These are:
 
• Expenses relating to entertainment;
• Purchase of a motor car (unless you're a dealer);
• Social and sports club subscriptions;
• Expenses relating to exempt supplies; and
• Private/personal expenses.
 
Input tax general rule #5:
If your business makes mixed supplies (taxable and exempt supplies), you need to check if you need to do an apportionment calculation on your input tax deductions.
 
Input tax general rule #6:
If you claimed input tax on a tax invoice you haven't paid within 12 months, you have to pay it back! You must include the specific VAT amount as output tax in block 12 of the relevant VAT return.
 
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I'd like to tell you how I saved R75 327 in Vat this year. No tricks. No evasion. Just two little things I didn't know I could claim.
 
By reading this letter, it will tell you how to avoid costly Vat mistakes, save you money, time and be your CEOs favourite person when you save the company R1 000s of Rands in Vat refunds this year.
 
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Input tax general rule #7:
If you discover you haven't claimed Vat back on back invoices, you can do so. But it must be within five years of the date of that invoice.
 
Input tax general rule #8:
If you only render zero rated supplies (fresh fruit and vegetables) you can still claim your input tax on your business expenses, such as rent, telephone, electricity, etc.
 
Don't be one of those business owners that loses out on valuable input tax. Follow these eight input tax rules to make sure SARS approves and pays your input tax claims every single time.
 
To find out more about how you can get your input tax back from SARS without a hitch, check out Input Tax 101.
 
It contains all the information you need to handle your input tax correctly so you don't lose out.


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Comments
2 comments


Stanley 2016-09-29 14:01:46

Good day...i would really like to help my client but i am uncertain about the Input Vat.my client bought Toyota Hilux xtra cab late last year2015 and he never claim for it,then sometime early this year2016 he trade in for a new bakkie.can he still claim Input vat on the vehicle he bought last year since he never claimed?

Shanna 2015-03-17 08:43:22

Hi

Can you tell me which section in the VAT Act covers Input Tax General Rule #7?

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