HomeHome SearchSearch MenuMenu Our productsOur products

Vat vendor: Don't let changes to the TAA confuse you about input tax deductions!

by , 13 May 2013
SARS is expected to make a number of new provisions in this year's income Tax Amendment Act or TAA. The reason? Strengthening the act will ensure SARS recovers as much as it can from companies that've registered with it. But don't see this as all bad news - you still have the right to make input tax deductions from SARS if you're a registered Vat vendor! Here's how...

 
SARS says while there are just more than two million companies on the South African tax register, only 791,000 of these are liable to submit tax returns and 395,000 of them have no taxable income at all.
 
That's why company tax collections for the 2013-14 tax year are budgeted at R170 billion. 
 
And companies with taxable income over R1 million – there are believed to be just 23,000 of these on the register – will pay about 30% of the total company tax, says The Business Day's BDLive website. 
 
But don't despair – it's not just a one-way cashflow out of your business and into SARS' coffers. 
 
You can still get money BACK from SARS – if you know how.
 
Here's how to ensure SARS refunds your business input tax claims…
 
See, input tax is the Vat you pay to your suppliers in the course of carrying on your business or enterprise, says FSPBusiness
 
But you can't claim back input tax on each and every business expense from SARS.
 
For example, don't even think of claiming back for staff refreshments that you provide like coffees, teas, soups or even staff canteens – where you don't recover the costs from your staff, explains the Practical Vat Loose Leaf.
 
The reason?
 
These expenses don't relate to the actual making of supplies in your business.
 
It's easy for an inaccurate input tax claim to trigger a Vat audit…
 
Not only will SARS disallow your claim, but trying to get an input tax refund for these purchases will raise a red flag for SARS to audit your business and see where else you're trying to get back money you're not due.
 
SARS is really clamping down in this regard, especially as tax dodgers are becoming a risk to revenues globally, says The Business Day's BDLive website.
 
So make sure you're not claiming for expenses that SARS won't refund you for in the first place.
 
You could just face an audit that'll mean you pay SARS more in the long run!

Other related input tax articles....
 


Related articles




Related articles



Related Products



Comments
0 comments


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 >>>