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Use this checklist to ensure you submit the right documents when you claim input tax credits

by , 12 June 2014
As a Vat vendor you can claim back the Vat you pay on your telephone account, stationery, professional subscriptions, fixed assets, trading stock and fixed property.

In fact, SARS lets you claim input tax credits on any expenses you incur to make taxable supplies.

But there's always a catch when you deal with SARS.

When it comes to input tax claims, the taxman wants you to submit the right documents. If you don't, they'll deny your claims and charge you penalties and interest.

Luckily there's a way to avoid this.

Our tax experts recommend you use the checklist below to make sure you submit the right documents when you claim input tax credits.

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This checklist will help ensure you have all the documents you need to substantiate your input tax claims

Experts behind the Practical Vat Loose Leaf Service provide the following checklist of documents you must submit when it comes to input tax claims:

1. Description of supply: Goods and services.
Documentary proof required:
Tax invoice.

2. Description of supply: Second-hand goods other than fixed property
Documentary proof required: You must keep the following records:

  • The name of the supplier and a copy of his ID.
  • The registration number of the supplier. You must verify the number through the business letterhead or other similar document.
  • The address of the supplier.
  • The date you got the second-hand goods.
  • The description of the goods.
  • The quantity or volume of the goods.
  • The consideration for the supply.

Note: If the value of the supply is R1 000 or more, keep a declaration (on a Vat 264 form) from the supplier showing whether the supply is or isn't a taxable supply.

3. Description of supply: Fixed property.
Documentary proof required:
Tax invoice.

4. Description of supply: Locally manufactured goods where the excise duty hasn't been included in the selling price.
Documentary proof required: You must keep a:

  • SAD 500 Customs Declaration Form.
  • DA 75 Ad Valorem Excise Duty Form, DA 616A Environmental Levy for Plastic Bags Form or DA 260 Excise Account Form.
  • Proof of payment of Vat, for example, a receipt by Customs and Excise.

If you want the complete list of the type of documents you must keep when claiming input tax, check out the Practical Vat Loose Leaf Service.

And don't forget this all important point when it comes to input tax claims.

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The right documents are 'king' when it comes to input tax claims

Claiming input taxes without the right documents will cost you dearly because your business will lose the credit and SARS will charge you a 10% penalty plus interest.



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