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Input tax on bank charges

Monday, 17 November 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: Could you claim VAT on bank charges even if you don't receive a VAT compliant tax invoice from the relevant banking institute? 

A: We accept that the taxes on the bank charges are in fact input tax and used (or consumed) in the making of taxable supplies.  As with all deductions, section 16(2) requires that the deduction must be supported by valid documentation, in this instance a valid tax invoice.  We are not sure why you say that "you don't receive a VAT compliant tax invoice” as the bank certainly has to issue a valid tax invoice.  It is our experience that they mostly do. 

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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