How far back into the past a vendor may claim input VAT
19 March 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
The answer to this query is based on legislation as at 2014/03/19.
Q: Problem: Client
did not claim input VAT for 200602.
The law: Proviso (1) to Section 16(3)(n) of
the VAT Act states that: "where any vendor is entitled under the preceding
provisions of this subsection to deduct any amount in respect of any tax period
from the said sum, the vendor may deduct that amount from the amount of output
tax attributable to a later tax period which ends no later than five years
after the end of the tax period during which-
aa) the tax invoice for that
supply should have been issued as contemplated in section 20(1);
bb) goods were
entered for home consumption in terms of the Customs and Excise Act;
second-hand goods were acquired or goods as contemplated in section 8(10) were
repossessed; dd) the agent should have notified the principal as contemplated
in section 54(3); or
ee) in any other case, the vendor for the first time
became entitled to such deduction, notwithstanding the documentary proof that
the vendor must be in possession of in terms of subsection (2) of this
Section 104 (1) and (5)(b) of the TAAct states that: "A taxpayer who
is aggrieved by an assessment made in respect of the taxpayer may object to the
assessment” and "The period for objection must not be so extended— if more than
three years have lapsed from the date of assessment or the ‘decision’;”
Discussion: Thus according to the VAT Act a VAT vendor may deduct input VAT in
a VAT period which is not older than 5 years in relation to another VAT period
in which the deduction was supposed to be claimed in the first place with
reference for example to the date on the supplier invoice. Thus in relation to
VAT that was supposed to be claimed in 2006/02 the latest VAT period in which
the input could have been claimed was 2011/02. Then according to the TAAct a
taxpayer may object to a VAT assessment not older than 3 years.
in this case will be in the form of a "request for correction” on the e-filing
website regarding the 2011/02 VAT period, where input VAT figures pertaining to
the 2006/02 VAT period will be claimed in the 2011/02 via a request for
Conclusion: In effect the VAT vendor is therefore able to claim a
VAT input which pertains to a period 8 years in the past a demonstrated above.
Question: Do you agree with the above?
A: I agree
with your interpretation of the VAT as well as TAA – this is possible.