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Can I claim deemed input VAT on second hand tyres purchased from a non-vendor?

Tuesday, 12 May 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I have a client who is registered for VAT. The client buys and sells second hand tyres. One of the client's main suppliers are not registered for VAT. Can my client claim deemed input tax on the second hand tyres? I know that second hand car salesmen can claim deemed input tax.

A: Para (b) of the definition of Input tax in s1 VAT Act includes a deemed input on second hand goods as defined in s1 which in our view will include second hand tyres.

Second-hand goods (other than fixed property) acquired under a non-taxable supply (i.e. from a non VAT vendor) must comply with s16(3)(a)(ii)(aa)VAT Act  and the documentation requirements in s20(8) which include:

a) VAT 264 form.

b) Proof of payment.

In addition to the above, the following information and documents must be verified and retained by the vendor making the deduction:

  • Where the supplier is a natural person, his/her identity number and a photocopy of his/her identity document.
  • Where the supplier is not a natural person, the name and any legally allocated registration number of the supplier and a photocopy of the business letterhead or other similar document of the supplier.

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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