Page 415 - Juta's Indirect Tax

IN 49 (2) VALUE-ADDED TAX ACT: INTERPRETATION NOTES IN 49 (2)
5.1 Input tax deduction in respect of vendors registered on the invoice basis
The standard basis of accounting for VAT is the invoice basis. A vendor registered on the invoice basis is generally entitled to deduct input tax in the period during which the invoice is received or payment is made, whichever is earlier. This deduction is subject to the vendor being in possession of a valid tax invoice.
Table A provides an overview of the documentary proof to be obtained and retained by a vendor that is registered on the invoice basis as well as references to the relevant sections of the VAT Act.
Table A – Applicable to a vendor registered on the invoice basis
ITEM
DESCRIPTION OF SUPPLY
DOCUMENTARY PROOF REQUIRED
A
Goods and services acquired under a tax- able supply
[s 16(3)(a)(i)]
Tax invoice.5
B
Second-hand goods (other than xed property) acquired under a non-taxable supply [s 16(3)(a)(ii)(aa)]
(a) VAT 264 form.
(b) Proof of payment.*
In addition to the above, the following information and docu- ments must be veri ed and retained by the vendor making the deduction:
Where the supplier is a natural person, his/her identity num- ber and a photocopy of his/her identity document.
Where the supplier is not a natural person, the name and any legally allocated registration number of the supplier and a photocopy of the business letterhead or other similar docu- ment of the supplier.
C
Second-hand goods: Fixed property ac- quired under a non-taxable supply
[s 16(3)(a)(ii)(bb)(a)]
A purchase or sale agreement which contains the following information:2
(a) The name of the supplier, and where –
(i) the supplier is a natural person, the supplier’s identity number must be recorded and veri ed with an identity document; or
(ii) the supplier is not a natural person –
•the identity number of the natural person
representing the supplier in respect of the supply must be recorded and veri ed with an identity document, and
• the legally allocated registration number of the supplier (not the natural person) must be recorded and veri ed with the business letterhead or other similar document.
Provided that the recipient must retain in the case of a –
• natural person, a copy of such identity document; and • a person other than a natural person, a copy of such
business letterhead or other similar document.
(b) The address of the supplier.
(c) The date upon which the second-hand goods were
acquired.
(d) The description of the goods.
(e) The quantity or volume of the goods.
(f) The consideration for the supply.
(g) A declaration from the supplier stating whether the supply
is a taxable supply or not.
In the event that the purchase or sale agreement does not contain the above information, the vendor must obtain and retain any other document containing the above information. In addition to the above, for all xed property acquired on or after 10 January 2012, proof that the xed property is registered, in a deeds registry, in the name of the vendor deducting input tax.
D
Second-hand goods: Shares in a share block company acquired under a non- taxable supply [s 16(3)(a)(ii)(bb)(b)]
Records as set out under section 16(3)(a)(ii)(bb)(a) [see Item C above].3
In addition to the above, for all shares acquired in a share block company on or after 10 January 2012, a copy of the signed use agreement between the company operating the share block scheme and a member of that company.
Juta’s IndIrect tax 2016 407