Avoid these five common input tax errors at all costs

43984, 08 Sep. 2014

Tags: input tax, input tax claims

Input tax is the Vat you pay to your suppliers in the course of your business, (i.e. on purchases as well as overheads) as well as Vat you pay on goods you import.
The good news is that, as a Vat vendor, it’s your duty to charge output tax and claim input tax as long as you can prove your claims.
While this is all good and well, what we often find is that there are certain common input tax mistakes that vendors make over and over again. As a result, they incur harsh penalties.
Don’t be one of these vendors!
Keep reading to discover five input tax errors you must avoid at costs.
Never make these five common input tax errors
#1: Never claim input tax deductions if you don’t have a valid tax invoice to back up your claims.
Your tax invoice will only be valid if it contains:
  • The words “Tax Invoice”;
  • The name, address and Vat number of the supplier;
  • The name, address and Vat number of the purchaser;
  • A serial number of the invoice; and
  • The date the product/service was issued, etc.
#2: Don’t claim input tax on goods and services you bought for entertainment (e.g. staff refreshments).
#3: Don’t incorrectly claim input tax for rental of cars, station wagons, combis or double-cab vehicles.
#4: Don’t claim input tax on subscriptions to social, sporting or recreational clubs, rugby or theatre tickets.
#5: Never claim notional input tax deductions for secondhand goods if you don’t maintain a proper second-hand goods register.
Be warned! All it takes is just one mistake for SARS to deny your input tax claim and slap you with penalties and interest! So never make these errors when it comes to input tax claims.

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