08 April, 2011


 Contact us at raimond@swellendamaccountants.com or visit our website http://www.swellendamaccountants.com or www.efilingincometaxreturns.com
Two steps you should immediately take to lower your taxes by thousands

g less tax right now. Make sure you aren’t making these three common Vat mistakes which can cost you thousands.

1.    Claim all of your input taxes. 

Many businesses are still unsure as to what transactions input tax can be claimed on. Read on to discover some lesser known Vat-carrying transactions on which you can claim input tax:

·         Bank charges

·         Flowers for the office/reception area

·         Rentals of office equipment – e.g. photocopy machine – you can claim the Vat every month, as per your payment

·         Delivery motorcycles

·         Promotional gifts – where they are given to clients – the value is NIL in terms of the Vat law

·         Medical expenses of employees where the employer foots the bill

·         Short-term insurance premium

·         Fixed property – even if you paid transfer duty – you can claim the transfer duty back

·         Office cleaning material (this includes toilet paper!)

·         Domestic airline tickets

·         Subscriptions to professional bodies – i.e. if you pay a subscription to a society that regulates your profession, you can claim the Vat back

·         Hearses and game viewing vehicles (only from 1/1/2007)

·         Staff busses, provided they’re designed to carry more than 16 people (including the driver)

Some better known transactions on which you cannot claim input tax:

·         Staff refreshments – coffees, teas, soups

·         Staff canteens – where you do not recover the costs from your staff

·         Municipal rates – they are zero-rated!

·         Car rental

·         Your office Christmas function

·         Country club memberships

·         Holiday homes

2.    If you export, make sure you apply the zero-rate of Vat. 

The onus is on you to get it right. This means keeping the right documents to prove the zero-rating to SARS.

Checklist: Essential documents to keep when you apply the zero rate of Vat to a direct export

·         The order or contract of sale between you and your foreign client

·         Your copy of the zero-rated tax invoice

·         Copy of a VAT262 for or VAT266 form, with the original Customs and Excise stamp on

·         Customs export documentation – eg. CCA1, SAD 550

·         As from 15 March 2006, a copy of the Customs export or removal document (DA74)

·         Proof that your foreign client received your goods, e.g. a signed delivery note

·         Proof of payment.

Tax Bulletin:
Source: Tax Bulletin
For more Tax and Vat tips from some of SA’s top tax experts click here.

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