Suggested solution to Question 1 May-09
Client 1
i. Purchase of new double cab delivery vehicle – Input tax on motor vehicle is denied.
ii. Stock purchased from non-vendor - no VAT was paid or not second hand goods
iii. Restaurant bill while meeting with client – Input VAT on entertainment cannot be
claimed.
iv. Bus ticket purchased for employee – exempt supply
v. Stock purchased from registered vendor – do not have a valid VAT invoice or zero
rated supply.
Client 2
Customs duty value 1 330 000
Importation surcharge 55 000
Plus: 10% of customs
133 000
value
1 518 000
VAT (R1 518 000 X 15%) 227 700
Client 3
• Second-hand motor vehicle: (1 March 2008)
This is a motor vehicle, no VAT can be claimed, as input tax prohibited (denied).
• company car – fringe benefit:
Every month: ((R200 000/115 x 100) x 0.3%) – R85) x (I month x 15/115) = R56.97
Deemed supply: Output VAT must be declared from March 2008 to June 2009.
• Fuel and maintenance cost: paid by employee not vendor thus no VAT implications.
• Insurance premium:The VAT can be claimed on the earlier of invoice or payment. The
input tax can thus be claimed when it is paid on the 25th of each month. This is a short
term insurance therefore the input VAT can be claimed:R1 257 x = R163.9
• Indemnity award:No output VAT, as no input VAT was claimed on purchasing.
• Second-hand single cab bakkie:Second hand asset from non-vendor can claim the input
VAT (not motor vehicle as defined). The purchase price is paid half on 15 August 2009 and
half 15 September 2009. 15 August 2009: R200 000 x = R26 086 x 50% = R13 043. 15
September 2009: R200 000 x = R26 086 x 50% = R13 043
• Company car – fringe benefit:
Every month:((R200 000 /115 x 100) x 0.6%) – R85 x 1 month x 15/115 = R125
Deemed supply: Output VAT must be declared from August 2009.
Client 1
i. Purchase of new double cab delivery vehicle – Input tax on motor vehicle is denied.
ii. Stock purchased from non-vendor - no VAT was paid or not second hand goods
iii. Restaurant bill while meeting with client – Input VAT on entertainment cannot be
claimed.
iv. Bus ticket purchased for employee – exempt supply
v. Stock purchased from registered vendor – do not have a valid VAT invoice or zero
rated supply.
Client 2
Customs duty value 1 330 000
Importation surcharge 55 000
Plus: 10% of customs
133 000
value
1 518 000
VAT (R1 518 000 X 15%) 227 700
Client 3
• Second-hand motor vehicle: (1 March 2008)
This is a motor vehicle, no VAT can be claimed, as input tax prohibited (denied).
• company car – fringe benefit:
Every month: ((R200 000/115 x 100) x 0.3%) – R85) x (I month x 15/115) = R56.97
Deemed supply: Output VAT must be declared from March 2008 to June 2009.
• Fuel and maintenance cost: paid by employee not vendor thus no VAT implications.
• Insurance premium:The VAT can be claimed on the earlier of invoice or payment. The
input tax can thus be claimed when it is paid on the 25th of each month. This is a short
term insurance therefore the input VAT can be claimed:R1 257 x = R163.9
• Indemnity award:No output VAT, as no input VAT was claimed on purchasing.
• Second-hand single cab bakkie:Second hand asset from non-vendor can claim the input
VAT (not motor vehicle as defined). The purchase price is paid half on 15 August 2009 and
half 15 September 2009. 15 August 2009: R200 000 x = R26 086 x 50% = R13 043. 15
September 2009: R200 000 x = R26 086 x 50% = R13 043
• Company car – fringe benefit:
Every month:((R200 000 /115 x 100) x 0.6%) – R85 x 1 month x 15/115 = R125
Deemed supply: Output VAT must be declared from August 2009.
