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Thread: Registering for VAT

  1. #1
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    Registering for VAT

    I am finally forced to register for VAT and will be from 1 June. I am in manufacturing/retail. What happens to all the raw materials and stock that I have? I will be selling ready-made items including VAT from June, but I cannot claim back the VAT that I paid on the raw materials in the months preceding June. I can see me losing a lot of money this way. Surely there must be an elegant solution?

    Can anyone help, please?
    Sometimes the only transport available is a leap of faith

  2. #2
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    I can't find any official SARS information which specifically deals with this, but it appears that one will be able to claim input VAT on your first VAT assessment for all business assets and goods held on date of registration.
    http://www.thesait.org.za/news/93930...nical-FAQs.htm - look at pre-registration expenses.

    I suspect that the legal basis for such an input VAT claim would be in terms of S18(4) of the VAT act, whereby there is a change of use of the assets for 100% non-taxable supplies (before registration) to 100% taxable supplies (after registration), allowing one to claim an input VAT adjustment.
    The input VAT adjustment would be based on the lower of market value and cost on the date of registration (date there is a change of use).

    Note that you would not be able to claim input VAT on any motor car, since input VAT on motor cars are denied ito. S17(2).

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