Amendments to the VAT Act – Input tax on imported goods
The amendment impacts on the tax period in which input tax on imported goods may be claimed. Prior to 1 April 2014 input tax could be claimed in the tax period in which goods were cleared for home consumption provided that the VAT was paid to SARS by the time that the VAT return in which the input credit had been claimed, was submitted.
For example, where a vendor imported goods on 15 March 2014 and paid the VAT to SARS on or before the 25th of April when the March VAT return was due, the input tax could be claimed in the March 2014 tax period.
In terms of the new rule, the vendor will only be allowed to claim the input tax credit in the April 2014 tax period (i.e. in the VAT return that is submitted in the 25th of May 2014).
Where imports of goods constitute a significant element of an organization’s business activities, this may have a negative impact on the organisation’s cash flows.
Information courtesy of: LexisNexis South Africa
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