HomeHome SearchSearch MenuMenu Our productsOur products

Use this checklist to ensure you meet your two legal requirements for notional input tax

by , 08 October 2014
Notional input tax is what you claim on second-hand goods. It works the same as claiming normal input tax except for a few small differences.

These differences are the legal requirements you need to fulfil to claim notional input tax.

If you don't comply with these legal requirements, SARS may suspect foul play and you'll face a Vat audit, and potentially a hefty fine as well.

To ensure this doesn't happen to you, use this checklist to make sure you follow these two legal requirements...

 

Checklist: Two legal requirements to claim notional input tax

 
Use this checklist to make sure your second-hand goods meet these two notional input tax requirements.
 
Requirement #1: This concession only applies to second-hand goods! Second-hands goods are:
Goods that someone else previously owned and used (including fixed property); or
A share block the previous owner converted into a sectional title unit.
 
*********** Reader's choice  ***************
 
Use this ten-step action plan to ensure you get your Vat refund from SARS on time, every time
 
Don't let SARS make you wait for your Vat refund.
 
 
***************************************
 
Requirement #2: If you're a Vat registered buyer and pay more than R50 for goods, you must keep record of the purchase of the second-hand goods. The records must contain the following:
 
The name and ID number of the seller, as well as a copy of his ID;
If the seller is a company, the name and ID number of the person representing the company and the company registration number, as well as a copy of the person's ID together with a copy of a letterhead of the company that verifies the company's name and registration number;
The seller must complete a Vat 264 form and you must keep it for five years;
The address of the seller;
The date of the purchase/transaction;
A description of the goods;
The quantity or volume of the goods; and
The amount paid for the goods.
 
Ensure your second-hand goods meet these two requirements before you try to claim notional input tax. If you don't you'll land up facing a Vat audit.
 
PS. You could be missing out on these 34 Input tax savings
 

Vote article

Use this checklist to ensure you meet your two legal requirements for notional input tax
Rating:
Note: 5 of 1 vote


Related articles




Related articles



Related Products