Is VAT applicable on this transaction? Is output VAT payable on this "reimbursement" of legal fees? And if so what section of the VAT act deals with this?
Client was in a legal battle with a supplier. Our client won the case and the other party was instructed by court order to pay our client's legal fees amounting to R520 000.00. Our client did claim input VAT when incurring the legal expenses originally. No VAT amount was indicated on the court documents where the amount to be paid out was stipulated.