Follow these four input tax rules and you’ll never claim an illegal input tax deduction again

Simangele Mzizi, Fsp Business, 11 Dec. 2014

Tags: input tax, claiming input tax, input tax claims, sars, how to claim input tax

Vat vendors know that our tax laws make it possible for them to claim input tax.

In fact, they’re so eager to claim and boost their cash flow, they end up making illegal deductions without even knowing it.

Naturally, SARS denies their claims. Or worse, audits them because it thinks they want to swindle it out of money.

The good news is you don’t have to suffer the same fate.

All you need to do is follow four input tax rules. Read on to find out what they are so you’ll never again claim an input tax deduction illegally.

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Are you sure you’ve claimed input tax on these five office expenses?

  1. Plants for the office;
  2. Flowers sent to sick staff;
  3. Medical bills;
  4. Promotional gifts; and
  5. Stationary orders for the office?
There are 29 other input tax claims you can use to your advantage too...

Find out what they are here and never miss out on another input tax claim again...



Four input tax rules you must follow to claim an input tax deduction legally

Rule 1: You must have a valid tax invoice for the transaction
We’ve said this often and we’ll say it again: “A tax invoice is the most important link in the Vat chain, without it, you can’t claim.”
Please note that SARS will only consider your tax invoice as valid if it contains these details:
  • The words “tax invoice”;
  • The name, address and Vat number of the supplier (airline, hotel etc);
  • Your company name and address and Vat number;
  • A serial number;
  • A date;
  • The description and quantity of the goods bought or services supplied;
  • Payment for the goods or services; and
  • The amount of Vat or a statement that says the price includes Vat and the rate of the Vat charge (i.e. either 0% if zero-rated or 14% if standard).
Rule 2: You can only claim input tax on certain items
For this, we recommend you check out the Input Tax 101 e-Report. It has all the items you can claim input tax on and those you can’t.
Rule 3: You can claim input tax on any item or expense that you use in the course of your business.
This means your supplier must charge Vat on the transaction.
Rule 4: You can claim input tax on second-hand goods you buy for your business
In terms of Vat law, this is notional input tax.
To make your claim legally, keep a record of the details of the person you got the goods from. And have a description of the goods and the amount.
Here, you must use the Vat 264 declaration form instead of a tax invoice.
Following these rules will help you make sure you never claim an input tax deduction illegally.
PS: Overall, there are eight rules you must follow. You can find the rest of the rules in the Input Tax 101 e-Report. It will also guide you so you never make mistakes when it comes to your input tax claims.

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