- How to calculate the fringe benefits of VAT on company cars
- One of the most common fringe benefits encountered on modern payrolls is the right to use a company car
Where an employee has the right to use a company car, you must calculate the VAT on the fringe benefit as follows:
Where the vehicle is a motor car (not a bus or kombi) and the input tax was specifically denied, the calculation is as follows:
0.3% x the determined va... ››› more
- [15 February 2017]
- Do I have any recourse if SARS slaps me with penalties, interest and additional tax?
- If SARS believes you intentionally under declared your output tax or over claimed your input tax, they will slap you with a hefty additional tax penalty of up to 200% of the tax.
So on top of the normal VAT of 14%, you'll now also need to pay additional VAT of up to 28%, plus a 10% penalty and interest.
You could even be prosecuted in court and can go to jail.
But is there a way out of th... ››› more
- [12 December 2016]
- Help! Our provisional tax debit bounced... How can I avoid paying the penalties?
- We received this call for help a few weeks ago, from a company (we'll call them XYZ Trading).
XYZ's financial and tax year end is the last day of December each year.
In December 2015, XYZ Trading's Financial Manager - Ted Jones - sat with the bookkeeper, to finalise the arrangements for the payment of the company's VAT and its provisional taxes. He wanted to make sure that everything would run... ››› more
- [05 August 2016]
- VAT Case law: What happens if you can't produce tax invoices for input tax claims?
- Within the VAT chain, the most important link is the tax invoice.
If you claim input tax without it, SARS will bring up an assessment and penalise you very heavily.
Here is a VAT case that shows you what happens if you claim input tax without tax invoices. Read it and see what you can learn from it... VAT Case 789, North Gauteng High Court, 10th September 2012:
In this VAT case, a vendor ... ››› more
- [21 December 2015]
- Do you find yourself in a bad position with SARS? Then use these 6 damage control tips
- If your business, for some reason or another, finds itself in a position where it can't pay it's VAT liabilities, you shouldn't just ignore it and hope for the best.
You're still liable! And if you don't acknowledge this, you'll be facing penalties, interest and jail time.
But if you happen to find yourself in a sticky situation with SARS, use these 6 damage control tips to get back on their... ››› more
- [03 December 2015]
- How ignoring one letter cost Mrs Brown R339 750 last month
- A certain subscriber, let's call her Mrs Brown, submitted her Vat return via eFiling as she always does. But because of the recent 'end of season' sale she had, her calculations showed a higher than usual input tax claim of R220 010 and R113 250 for output tax. So the Vat return resulted in a Vat refund of R106 760 to Mrs Brown.
But, SARS sent her the dreaded Vat pop-up letter. As she was busy... ››› more
- [23 July 2015]
- Don't miss the deadlines for your employees' tax certificates!
- SARS will fine your company for an error or for missing a deadline. The responsibility for making no mistakes is yours. SARS's system will quickly identify errors or any sort of anomalies on your employees' tax certificates.
Moreover, if you miss any deadline, you'll be fined by SARS.
Here's how to ensure you're never penalised by SARS!
Keep in mind that your employees' tax certificates... ››› more
- [05 June 2015]
- A Vat vendor claimed R3 million input tax and ended up paying SARS R4.5 million - don't make the same mistake!
- When SARS asked for the valid tax invoices from the Vat vendor to verify his input tax claim, he couldn't provide them. So SARS raised an assessment and added an understatement penalty and interest.
Not only did he lose out on the R3 million he claimed, he now had to fork out and pay R4.5 million to the tax man...
But he could've avoided all that if he'd done this one simple thing... Read o... ››› more
- [01 June 2015]
- Here are 17 entertainment items you CAN claim input tax on
- If you thought you can claim Vat back on entertainment expenses, you'll be nervous to know that one of the specific input tax deductions SARS denies is entertainment.
When looking at entertainment from a Vat perspective, here's how the Vat Act defines it:
Entertainment: When you provide food, beverages, accommodation, entertainment, amusement, recreation or hospitality of any kind, to your ... ››› more
- [25 May 2015]
- Comply with Vat Act to avoid these four SARS penalties
- If there's one golden rule you should follow in business, it's this: Make sure you comply with the Vat Act if you don't want SARS to charge you penalties and interest.
In practice, if you don't comply with the Vat Act there are four penalties SARS can charge you for.
Here's what they are...
The four types of penalties SARS charges Vat non-compliers
1. Fixed amount administrative/no... ››› more
- [20 May 2015]