HomeHome SearchSearch MenuMenu Our productsOur products

Three requirements you must meet to qualify for notional input tax

by , 12 August 2015
You deal with second-hand goods and sometimes buy them from non-Vat vendors.

If the seller is a Vat vendor, you'll get a tax invoice. But if he isn't a Vat vendor, he can't charge you Vat on those goods, and he can't give you a tax invoice.

So if you're a Vat vendor why not claim notional input tax on second-hand goods you buy from non-Vat vendors?

You don't need a tax invoice, but there are three requirements you need to meet for notional input tax.

Read on to find out what they are...

**********Fully updated with the recent changes to Vat law**********
Can you really afford not to be 100% sure about every input tax claim you submit?

Most Vat vendors make one of two big mistakes when claiming their input tax.
They either:
1.      Don't know about certain input tax deductions which SARS allows, and then lose out on important cash flow savings for the business; or
2.      Claim when they shouldn't and face SARS penalties and assessments!
Don't make the same mistake. Here's how to be 100% sure about all your input tax claims
Make sure you meet these three requirements before you claim notional input tax
Requirement #1: This concession only applies to second-hand goods (not services).
Requirement #2: Second-hand goods are spelt out in the Vat Act as being:
        Goods which were previously owned and  used;
        Fixed property; and
        A share block share converted into a sectional title unit.
But, second-hand goods aren't:
        Animals (livestock);
        Gold coins  issued by the South African Mint – e.g. Kruger Rands; and
        Prospecting, mining and exploration rights.
Read on for the final requirement.
**********Highly Recommended**********
Do you want to minimise your Vat bill?
The Practical Vat Loose Leaf Service will allow you to calculate Vat efficiently and take advantage of a little known, legal, Vat saving strategies.
It will:
  • Show you which deductions you can make;
  • Save you R1000's in time and money;
  • Tell you how to use specific Vat benefits in practice;
  • Explain the latest changes in Vat;
  • Protect you from typical mistakes made when calculating and paying Vat and how to avoid them;
  • Show you how to identify legitimate Vat invoices; and
  • Will show you how to keep your Vat payments up to date.
Get your copy here and start saving on your Vat bill…
Requirement #3: If you pay more than R50 for the goods, you must keep records of the purchase. These records must contain the following:
1.      A VAT264 form;
2.      The name and ID number of the seller, as well as a copy of his ID;
3.      The date of the purchase/transaction;
And six more records. To get the full list of records, and comprehensive information you need to know about claiming input tax, simply follow this link.
P.S. Did you know SARS made changes to the way you claim input tax on the 1st of April. If you're doing the same thing you've always been doing, you could be setting yourself up for a denied input tax deduction. Here's everything you need to know.

Related articles

Related articles

Watch And Learn

Related Products


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance

Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today

Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism

This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands

Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>