Accounting and Tax Q&A
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"How do I apply apportionment?"

I battle with apportionment. How do I do it correctly?

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  • How to apply apportionment? what is the different apportionment methods?

 User  Anna asked on 25 Feb. 2013


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 User kallievander answered question on 06 Mar. 2013
Dear Anna,
As you know, the basic principle is that you can claim input tax deductions on the goods you buy and services you obtain, in so far as they are used in your business to make taxable supplies. Even supplies made at the zero rate. But not on those used to make exempt supplies, if any!

The SARS approved method is the turnover method of apportionment.

The formula is -
Total value of taxable supplies / Total value of all supplies = input tax apportionment %

Value of taxable supplies excludes Vat
Taxable supplies include zero rated supplies.
'All supplies' includes taxable, zero-rated, exempt and non-supplies
If the calculated % exceeds 95%, you may claim the full amount of Vat.

You must obtain written approval from SARS to apply another apportionment method, such as the floor space method.

Happy apportioning!


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