Q: A client wants
to buy a mini bus taxi to transport passengers. Can he claim input VAT on the
A: From the facts
provided we don’t know how the minibus will be used by the enterprise. If, for instance it is used for fare paying
passengers, it would be to make an exempt supply and no input tax would arise
A minibus is specifically included in the definition of
motor car (in section 1 of the Value-Added tax Act). Section 17(2)(c) the denies the deduction of
the input tax in respect of any motor car supplied to (or imported by) the
vendor. The only exception to this rule
is where the motor car (the minibus) is acquired by the vendor exclusively for
the purpose of making a taxable supply in the course of an enterprise which
continuously or regularly supplies motor cars (by way of sale, under an
instalment agreement or by way of rental at an economic rental
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.
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