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Claiming input VAT on a building from which a vendor will operate

09 December 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I would like to know if a company that is registered for VAT can claim Input Vat on the purchase of Fixed Property [Building], from which their company will operate.

A: Our guidance assumes that the fixed property (goods as defined) was acquired by the vendor (the company) wholly for the purpose of consumption, use or supply in the course of making taxable supplies or partly so. "Goods” means corporeal movable things, fixed property, any real right in any such thing or fixed property, and electricity, but excluding money.  

The tax can then be deducted, but remember there are special rules in this regard.  Section 16(3)(a)(iiA) of the Value-Added Tax Act provides that the vendor (accounting for tax on the invoice basis) can only make a deduction of the input tax to the extent that payment of any consideration which has the effect of reducing or discharging any obligation relating to the purchase price of the property has been made. This is because the provisions of section 9(3)(d) apply.

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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