25. SARS VAT Vendors Guide.pdf

Input tax may be deducted on the acquisition of any

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Input tax may be deducted on the acquisition of any vehicle which does not fall within the definition of a “motor car”, provided that it is used for taxable supplies. The term “motor car” includes the following vehicles (that is, input tax will generally be denied): Double cab bakkies (LDVs) Ordinary sedan type passenger vehicles Station wagons Minibuses Sport utility vehicles (SUVs) The term “motor car” excludes the following vehicles: Goods transportation trucks Single cab light and heavy delivery vehicles Motor cycles Caravans Ambulances, game viewing vehicles and hearses Vehicles capable of accommodating more than 16 persons (for example, a bus) Vehicles with an unladen mass of 3 500 kg or more Special purpose vehicles constructed for purposes other than the carrying of passengers Equipment such as bulldozers, graders, hysters, harvesters and tractors Hearses and game viewing vehicles are specifically excluded from the definition of “motor car”, as these vehicles are generally not used for private purposes, but are applied exclusively in a particular type of business (that is, game viewing vehicles for game viewing, and hearses for the transport of deceased persons). Input tax on the acquisition of hearses and game viewing vehicles may be deducted where the vehicle is used exclusively for making taxable supplies. A vendor is also entitled to an input tax deduction on the acquisition of a motor car if it is acquired so that it can be permanently converted into a game viewing vehicle or hearse if that type of vehicle is required for use in the enterprise. (For example, an enterprise that supplies funeral or game viewing services.) In such cases the vendor will be liable for output tax on the subsequent supply (sale) of the vehicle. The VAT incurred on repairs, maintenance and the general running costs of a motor car such as insurance, tyres, engine oil and servicing may, however, be deducted as input tax if the vehicle is used exclusively in the course of making taxable supplies. This could also include modification and installation costs incurred after the acquisition of the motor car (for example, canopy modification or installation of a built-in toolbox for a bakkie). However, VAT 84 Section 8(14)( a ). 69
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VAT 404 – Guide for Vendors Chapter 8 incurred on modifications made prior to the supply of the motor car cannot be deducted by the purchaser as input tax if it forms part of the motor car as supplied. See Interpretation Note 82 for more information . 8.6 Petty cash payments Vendors are not obliged to obtain tax invoices for purchases not exceeding R50. These are usually expenses which are paid from petty cash for small items such as postage stamps, stationery, parking etc. Even though it is often the case that no tax invoice is required for petty cash purposes, you will need to keep the till slip, cash slip or sales docket with details of the purchase in a petty cash book or similar record in order to deduct the input tax. Make
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  • Fall '17
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