Summary Tax3761 test 1 2025 solutions

Tax3761 test 1 2025 solutions

, CLIENT 1

Step 1: Calculate the VAT on the purchase of the second-hand delivery vehicle

The VAT on the purchase of the second-hand delivery vehicle from a non-VAT vendor is
calculated based on the purchase price, which is R287,500. Since RM paid 80% of the
selling price, the VAT input claim is based on the full purchase price because the time of
supply for goods is when the goods are delivered or when payment is made, whichever is
earlier. However, since the vendor is not a VAT vendor, the input tax claim will be based on
the tax fraction (15/115) of the lesser of the consideration or the open market value. Given
the open market value (R300,000) is higher than the purchase price (R287,500), we'll use
the purchase price for calculation. VAT input = R287,500 * (15/115) = R37,500.



Step 2: Calculate the VAT on local and export sales

Local sales: R900,000 * 15% = R135,000

Export sales are zero-rated, so VAT = R0.



Step 3: Calculate the VAT input on laptops purchased from Watson (Pty) Ltd

The invoice did not include RM's VAT number, which might affect the input claim. However,
assuming the invoice is otherwise compliant, VAT input = R230,000 * (15/115) = R30,000.



Step 4: Calculate the VAT input on membership subscription fees

VAT input = R11,500 * (15/115) = R1,500.



Step 5: Calculate the VAT on imported laptop raw materials

The value for VAT purposes includes the purchase price plus import surcharges and
customs duty. VAT = (R100,000 + R9,500 + R115,000) * 15% = R224,500 * 15% = R33,675.



Step 6: Calculate the total VAT payable or refundable

Total VAT outputs = R135,000 (from local sales)