the recovery of educational fees from an employee a ‘vat-able’ transaction?
pays for an employee’s study fees. The employee signs a ‘work-back’ contract
but leaves employment before the ‘work-back’ is complete. The employer now
wants to recover the money from the employee. Does the employer charge VAT on
supply by the employer, when the study fees were paid, was not the supply of an
educational service. It was not a taxable supply because it was a either
a supply of money or a financial service. When the employer recovers the
money it relates to a debt that arose when the employee left the employment.
The repayment would then not be in respect of a taxable supply.
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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