100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
TAX3701 Assignment 2 (100% COMPLETE ANSWERS) Semester 1 2025 - DUE 17 April 2025 $2.50
Add to cart
Quickly navigate to
Preview
  2.  
  3. University Of South Africa
  4.  
  5. • Taxation of Business Activities

Exam (elaborations)

TAX3701 Assignment 2 (100% COMPLETE ANSWERS) Semester 1 2025 - DUE 17 April 2025

4 reviews
 12 purchases
  • Course
  • • Taxation of Business Activities
  • Institution
  • University Of South Africa
  • Book
  • International Taxation of Banking

Exam (elaborations) TAX3701 Assignment 2 (100% COMPLETE ANSWERS) Semester 1 2025 - DUE 17 April 2025 • Course • Taxation of Business Activities (TAX3701) • Institution • University Of South Africa

Preview 3 out of 17  pages

Document information

  • April 9, 2025
  • 17
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • taxation of business activities tax3701

Connected book

book image

Book Title:

Author(s):

  • Edition:
  • ISBN:
  • Edition:

Written for

  • University of South Africa
  • • Taxation of Business Activities
All documents for this subject (1)

4  reviews

review-writer-avatar

By: nontobekomsweli22 • 1 week ago

review-writer-avatar

By: snohzuke04 • 1 week ago

review-writer-avatar

By: kananelochaka • 1 week ago

review-writer-avatar

By: istudy1 • 2 weeks ago

Seller

avatar-seller
tabithamwendwa73

Reviews received

Content preview

Exam (elaborations)
TAX3701 Assignment 2 (100% COMPLETE
ANSWERS) Semester 1 2025 - DUE 17 April
2025
 Course
 Taxation of Business Activities (TAX3701)
 Institution
 University Of South Africa
 Book
 International Taxation of Banking

Taxation of Business Activities - TAX3701 Assignment 2 Semester 1 2025 -
DUE 17 April 2025 ;100 % TRUSTED workings, Expert Solved, Explanations
and Solutions....




VAT calculation South Africa Output and input VAT SARS VAT return VAT
refund or payment VAT 201 return example VAT on imports South Africa VAT
on bad debt recovery VAT on insurance claims VAT on rent income VAT on
motor vehicles South Africa South African VAT system VAT for small
businesses VAT zero-rated exports VAT exempt income South Africa Input
tax claim rules VAT credit notes VAT inclusive vs exclusive SARS VAT guide
VAT on commercial property VAT on financial services How to calculate VAT
for a South African business SARS rules on input tax deductions Examples of
output VAT and input VAT When to declare VAT on insurance payouts
Claiming input VAT on imported goods in South Africa Can you claim VAT on
a bakkie in South Africa? VAT treatment of staff amenities like coffee
machines Difference between zero-rated and exempt supplies How to treat
bad debt recovery under VAT VAT accounting for manufacturing businesses
TAX3701 Assignment 2 Semester 1 2025 - DUE 17 April 2025 QUESTION 1
(30 marks, 54 minutes) Lucky Dlamini Steel (Pty) Ltd (LDS) manufactures a
wide variety of steel products for the building industry in South Africa. LDS is
a small business corporation as defined in the Income Tax Act. LDS’s
financial year ends on 28 February 2025 and the company is also a
registered VAT vendor. LDS only makes taxable supplies and have all the
valid tax invoices in support of expenses incurred and payments made. The
accountant provides you with the following information for the two-month
VAT period ending on 28 February 2025. All amounts stated excludes VAT,
unless specifically stated otherwise: INCOME/RECEIPTS NOTE AMOUNT R

,Sales to South African customers 1 Sales to customers in Germany 85 000
Receipt from Naidoo Attorneys 2 18 975 Interest received on investments 5
780 Insurance payment received 3 189 750 Rent received 4 75 500
EXPENSES/PAYMENTS MADE Bank charges 3 790 Interest paid to AZN Bank 9
820 Steel sheets purchases for South African suppliers 5 950 350 New single
cab bakkie purchased from a registered VAT vendor 6 425 500 Steel cutting
machine purchased 7 95 000 A new coffee machine purchased for the
canteen 25 750 Steel products imported from Italy 8 275 350 Electricity 100
851 Legal fees 2 2 250 Salaries and wages 352 500 Membership fees 9 16
675 Notes 1. Included in the amount of the sales to South African customers
is an amount of R13 200 for sales made to Mr. D. Moto on 15 January 2025.
Mr. D. Moto was finally sequestrated on 25 February 2025 in the Pretoria
High Court. 2. The receipt of R18 985 from Naidoo Attorneys relates to an
amount that was written off as a bad debt on 20 February 2024 for a sale to
Peter Odinga Manufacturing (Pty) Ltd during the 2024 year of assessment.
This amount includes VAT. The legal fees paid of R2 250 relates to the
collection of the bad debt previously written off. 3. LDS received an amount
of R189 750 on 21 February 2025 from its insurance company. The amount
received represents a claim for the following: • R171 250 for a damaged
steel cutting machine used in the manufacturing process. • R18 500 for a
damaged coffee machine used by staff members in their canteen. 4. The rent
received of R75 500 is for rental income from DCT Consulting (Pty) Ltd
renting vacant office space from LDS. 5. Included in the purchases amount of
R950 350 is an amount of R15 250 that was identified as damaged goods on
delivery to the factory building of LDS on 17 February 2025. The supplier has
issued the necessary tax credit note on 22 February 2025 for LDS. 6. A new
single cap bakkie was purchased on 1 February 2025 for an amount of R425
500 (including VAT). The bakkie was provided as a company vehicle to Mr. D
Matebula, the marketing manager of LDS, on 1 February 2025. Mr. Matebula
makes not contribution to the cost of the bakkie. 7. A second-hand cutting
machine was purchased from a non-vendor on 2 January 2025 for R95 000.
LDS paid R50 000 of the purchase price on 15 January 2025 and the balance
of R40 000 on 3 March 2025. 8. LDS purchased special steel plates from an
Italian supplier for R275 350 on 17 January 2025. LDS also had to pay import
surcharges of R15 180 on 19 January 2025 before the goods were released
from customs in Durban. 9. LDS paid the following membership fees
(including VAT) on 1 February 2025: • R10 350 to the Engineering Society of
South Africa for the membership fees of the three mechanical engineers
involved in the manufacturing of the steel products at LDS. • R6 325 to the
local golf club for the membership fees of the managing director of LDS.
REQUIRED: MARKS Calculate the VAT payable by/refundable to Lucky Dlamini
Steel (Pty) Ltd for the two-month VAT period 28 February 2025. Please
provide a reason should any amount not be subject to output tax or does not
qualify for an input tax deduction. 30

, QUESTION 1: VAT Calculation for Lucky Dlamini Steel (Pty) Ltd for the Two-
Month VAT Period Ending 28 February 2025

To calculate the VAT payable or refundable to Lucky Dlamini Steel (Pty) Ltd (LDS) for the
VAT period ending on 28 February 2025, we need to calculate both output VAT (on sales and
other income) and input VAT (on purchases and other expenses), and determine the net VAT
payable or refundable.

The standard VAT rate in South Africa is 15% unless otherwise stated.

1. Output VAT (Sales and Income)

A. Sales to South African Customers:

 Sales to South African customers: This includes taxable sales, and output VAT is due
on these sales.
 We are not provided with the exact amount of the total sales. However, since an amount
of R13,200 is for sales made to Mr. D. Moto, who was sequestrated on 25 February
2025, we need to consider this specific sale in the VAT calculation.
 Output VAT on sales to South African customers is calculated as 15% of the total sales
(minus any bad debts).

B. Sales to Customers in Germany (Exports):

 Sales to Germany: Exports are zero-rated for VAT purposes. Therefore, no VAT is
payable on this sale.

C. Receipt from Naidoo Attorneys (Bad Debt Recovery):

 Bad debt recovery: The receipt of R18,975 from Naidoo Attorneys relates to the
recovery of a bad debt written off during the 2024 year of assessment. Since VAT was
previously claimed on the original sale, this receipt is subject to output VAT.
 VAT on the recovery amount = R18,975 × 15% = R2,846.25.

D. Rent Received:

 Rent received: Rental income is subject to VAT if the rental property is used for
commercial purposes.
 The rent received is R75,500, and output VAT is calculated at 15% of this amount.
 VAT on rent = R75,500 × 15% = R11,325.

E. Insurance Payment Received:

 Insurance claim received: The insurance payment includes VAT only for the damaged
steel cutting machine and not for the coffee machine, which is a staff amenity.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller tabithamwendwa73. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $2.50. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

70001 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling
$2.50  12x  sold
  • (4)
Add to cart
Added