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And then your total VAT claim / payment at the end of the day is your VAT Output (The VAT on your invoices which you owe SARS) - VAT Input (The VAT you claim on expenses and other invoices).
In theory, if you are making a profit, you should have more output than input ... but not always the case ... if you buy a lot of stock in month x, then you may have more VAT Input than what you sold (VAT Output) ... confusing enough
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Hi Everyone,
Thanks for all the usefull tips i really appreciate them.
With regards to the income tax for the year i.e. 28% tax, for your income and expenditure do you exclude or include VAT from the figures for this calcultation ?
Thanks in advance
If you are VAT registered, you exclude the VAT.
By the way ... if you are a small company (If I remember correctly < 5mil turnover), registered as a CC, and the members have no other businesses, you could qualify for Small Business Corporation ... saves you a lot in tax ... you should check it out.
If you need any Accounting, Tax or even Financial Management advice, PM me and I'll try help and keep your information confidential.
Visit my Android ZA website - a website dedicated to Google Android in South Africa - www.androidza.co.za
For Income Tax returns(IT14) for your CC/Coy a Vat recon always have to be performed. ie reconciling the input and output items for Vat, to the Income and Expenses/Assets to be declared on tax return. SARS love to audit these. And expect another assessment for under declared VAT.
Vat is never included in income and expense figures. A decent accounting package will do this, and link it to the annual recon.
Sean Goss We all are scared, but only few are brave.
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If you need any Accounting, Tax or even Financial Management advice, PM me and I'll try help and keep your information confidential.
Visit my Android ZA website - a website dedicated to Google Android in South Africa - www.androidza.co.za
Can VAT be claimed back on Rental Deposits and Electricity Deposits and can this be deducted as an business expense?
If you need any Accounting, Tax or even Financial Management advice, PM me and I'll try help and keep your information confidential.
Visit my Android ZA website - a website dedicated to Google Android in South Africa - www.androidza.co.za
Dave A (22-Oct-09)
Quite correct, no VAT on entertainment. As to the coffee machine and computers - all of these are expenses in order to generate income and the VAT is claimable. The concept of only direct expenses in producing a revenue is not quite correct, that is input tax for generating an item for sale. the exceptions would be let say traffic fines or obvious fronting, such as claiming taht your Harley Davidson is a delivery bike and therefore VAT can be claimed. A computer, coffee machine are all genuine expenses used to generate income, indirectly. If the EDCON chaps suggestion that IT costs are split for VAT purposes then so should electricity, rent and in fact every expense. This would be impossible and uncontrollable from the governments point of view. they probably split and apportion cost for different cost centres. Eg a business running different cost centres for incentives and bonuses might divide the rent up between 3 departments etc. in summary all VAT paid is claimable. As with any accounting cost if it is not a genuine expense or perhaps outlay is a better word, then it cannot go through the books anyway. One final pointer, fringe benefits are supposed to be VAT items.
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