Vat Registration after commencement of Operation & claiming Pre-registration Inputs

[David Gregory]

Good day All,

I hope you can assist me. I have a couple of questions but some background first. I am looking at importing a maize milling machine. I can only register for Vat once trading has commenced and the thresholds (likely voluntary or required) have been met. Maize / Mielie meal and maize are taxable supplies but zero-rated (Schedule 2 - Part B I think), thus vat inputs can be claimed on equipment & expenses (Correct me if I am wrong here.).

Question 1
Am I able to claim the vat / customs duties on the plant plus other expenses which would be incurred prior to the Vat registration date?

My research indicates that under Section 18 (2) I may claim the input on the capital equipment and section 19 for the other expenses.

The Vat on the machinery is around R1.0 million plus there are lease costs etc.

Question 2
Is Sars going to disallow my input claims for the capital plus day to day running costs as I would expect to be in a refund position each month?

Lastly anything I have missed.

Thanks.

[David Gregory]

Hi All,

Can anyone provide me with guidance with this?

Thanks.

[Dave A]

My immediate thought was when you register for VAT you can claim VAT on the value of inventory, fittings, capital equipment etc. in hand (which it looks like you're already on top of).

I've got no experience with the issues around your question 2, though.

[CLIVE-TRIANGLE]

SARS would have no reason to disallow your claim, because it complies with the Act.