Accounting for Attorneys
Second Edition
(Revised Reprint)
(VAT Changes)
Gordon Adams
BCom Hons (Acc) (UWC) CA (SA)
Lecturer: University of the Western Cape
Silke de Lange
BAcc LLB MCom (Taxation)
Lecturer: University of Stellenbosch
Ansia Storm
BCom Management and Financial Accounting, Hons BCom Financial Accounting
MCom Forensic Accountancy, MCom South African and International Taxation
Senior Lecturer: North-West University
,
,5 Value-added tax (VAT)
Learning objectives
After studying this chapter, you should be able to:
l understand the principle of VAT
l explain the difference between input tax and output tax
l list the requirements of a valid tax invoice
l explain when to register as a VAT vendor
l account for VAT in the accounting records.
55
, Accounting for Attorneys
Contents
Page
5.1 Introduction ...................................................................................................................... 57
5.2 Terminology...................................................................................................................... 57
5.2.1 Registration ......................................................................................................... 57
5.2.2 Vendor ................................................................................................................. 57
5.2.3 Category .............................................................................................................. 57
5.2.4 Supply of goods or services ............................................................................. 58
5.2.5 Time of supply .................................................................................................... 58
5.2.6 Input tax ............................................................................................................... 58
5.2.7 Output tax ........................................................................................................... 58
5.3 Supplies ............................................................................................................................. 59
5.3.1 Taxable supplies ................................................................................................. 59
5.3.2 Exempt supplies.................................................................................................. 60
5.4 Input and output tax ....................................................................................................... 60
5.5 The requirements of a valid tax invoice ...................................................................... 61
5.6 Operation of the VAT system ....................................................................................... 63
5.7 Recording procedure (ledger accounts) ..................................................................... 64
5.7.1 Input tax ............................................................................................................... 64
5.7.2 Output tax ........................................................................................................... 66
5.7.3 VAT control account ......................................................................................... 66
5.8 Sundry aspects ................................................................................................................. 67
5.8.1 Tax returns and payments ................................................................................ 67
5.8.2 Assessments ........................................................................................................ 67
56
Second Edition
(Revised Reprint)
(VAT Changes)
Gordon Adams
BCom Hons (Acc) (UWC) CA (SA)
Lecturer: University of the Western Cape
Silke de Lange
BAcc LLB MCom (Taxation)
Lecturer: University of Stellenbosch
Ansia Storm
BCom Management and Financial Accounting, Hons BCom Financial Accounting
MCom Forensic Accountancy, MCom South African and International Taxation
Senior Lecturer: North-West University
,
,5 Value-added tax (VAT)
Learning objectives
After studying this chapter, you should be able to:
l understand the principle of VAT
l explain the difference between input tax and output tax
l list the requirements of a valid tax invoice
l explain when to register as a VAT vendor
l account for VAT in the accounting records.
55
, Accounting for Attorneys
Contents
Page
5.1 Introduction ...................................................................................................................... 57
5.2 Terminology...................................................................................................................... 57
5.2.1 Registration ......................................................................................................... 57
5.2.2 Vendor ................................................................................................................. 57
5.2.3 Category .............................................................................................................. 57
5.2.4 Supply of goods or services ............................................................................. 58
5.2.5 Time of supply .................................................................................................... 58
5.2.6 Input tax ............................................................................................................... 58
5.2.7 Output tax ........................................................................................................... 58
5.3 Supplies ............................................................................................................................. 59
5.3.1 Taxable supplies ................................................................................................. 59
5.3.2 Exempt supplies.................................................................................................. 60
5.4 Input and output tax ....................................................................................................... 60
5.5 The requirements of a valid tax invoice ...................................................................... 61
5.6 Operation of the VAT system ....................................................................................... 63
5.7 Recording procedure (ledger accounts) ..................................................................... 64
5.7.1 Input tax ............................................................................................................... 64
5.7.2 Output tax ........................................................................................................... 66
5.7.3 VAT control account ......................................................................................... 66
5.8 Sundry aspects ................................................................................................................. 67
5.8.1 Tax returns and payments ................................................................................ 67
5.8.2 Assessments ........................................................................................................ 67
56
