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The 5 Vat implications you need to know to benefit from making a fixed property input tax claim!

by , 22 January 2013
The Vat implications of buying a new property for your business can be complicated if you're not a tax practitioner. You need to know what type of fixed property or real estate Vat applies to and how to apportion Vat correctly in these cases. Here are 5 special Vat rules you need to know to ensure you'll get your input tax back from SARS:

While many of China's major commercial sectors have already implemented a Vat pilot programme for the modern services and transportation sectors, a number of industries have yet to transition from the business tax to  , including the construction and real estate sectors, according to a KPMG report.
 
These sectors have had widespread analysis and scrutiny of tax policies, as business tax revenue from construction and fixed property real estate represented 51% of total business tax revenue in China.
 
Locally, Vat does apply to fixed property and has done so for many years. But, if your business has recently acquired a fixed property and you're rubbing your hands in anticipation of the input tax deduction you're about to claim, there are five rules you need to know, according to FSP Business Vat expert, Kallie van der Merwe
 
5 special Vat rules to apply to your fixed property Vat transaction to ensure you'll get your input tax back from SARS:

Rule #1: Your claims must relate to a taxable supply
Rule #2: Charge 14% Vat on the sale of property that forms part of your business assets
Rule #3: Claim the input tax on the purchase of fixed property
Rule #4: If the seller is a non-Vat vendor, the purchase is treated as a second-hand sale
Rule #5: If you will be using the fixed property for both taxable and exempt supplies, you can't claim all your input tax!

For a detailed explanation on input tax rules, get your hands on our FSP Business Practical Vat Loose Leaf. In the Practical Vat Loose Leaf we've got a dedicated chapter on input tax, in this chapter you'll discover...
  • When and how to claim your input tax
  • Two things you must do to guarantee your input tax claim
  • 7 items you can claim input tax on
  • 9 more items you CAN claim input tax on, but didn't
  • know about
  • 5 exceptions to the rule against entertainment expenses  
  • Motor vehicles you can and can't claim input tax on
Get your copy of the Practical Vat Loose Leaf  today!

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