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Input VAT on membership fees paid by employers on behalf of their employees

Tuesday, 25 November 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: Do you know what is the current position with regards to claiming input VAT on membership fees paid by the company?

A: We accept that your request relates to the instance where an employer pays the subscription on behalf of the employee.  There was no change since SARS changed the practice generally prevailing in 2012 / 2013.  The position is stated in paragraph 8.5.2 as follows: "The VAT incurred on any fees or subscriptions to professional organisations may not be deducted as input tax.”  This is not 100% correct as a sole practitioner (and vendor) would be able to make the deduction.  

The problem is that the definition of input tax requires that the services must have been "…supplied to the vendor…” and "…acquired by the vendor … for the purpose of consumption, use … in the course of making taxable supplies…”

The service is supplied to the SAIT member and not to the employer and therefore not input tax arises. So the employer would not be able to make the deduction on that basis.  

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.

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