Adjustments Flashcards
Adjustments: % taxable use -> 0% s18(1)
Asset now used for non-business purposes
Output tax: 15/115 x OMV
Extra input tax: 15/115 x Lower of Cost or OMV x % non-taxable use before change
Adjustments: 0% -> % taxable use s18(4)
Goods acquired for non-taxable supplies and later used for taxable supplies
Input tax: 15/115 x Lower of Cost (inc. VAT) or OMV x % taxable use
Adjustments: Increase s18(5) or Decrease s18(2)
For taxable goods, since the extent of taxable use may change and we only need to make the adjustment @ YE
No adjustment for s18(5) or s18(2) needed when:
Cost < R40 000 (VAT inclusive)
% change is <= 10%
Input, such as motor car, was denied
Irrecoverable debts s22(1)
The vendor has accounted for output tax in respect of taxable supply and all/part of consideration subsequently becomes irrecoverable -> The vendor becomes entitled to an input tax deduction
Any amount subsequently recovered -> Output tax
Creditors outstanding in excess of 12 months s22(3)
When a vendor on the invoice basis has deducted input tax in respect of a taxable supply of goods or services to him and has not paid the full consideration for the supply within the 12-month period from the end of the tax period in which the deduction was claimed.
The input tax claimed must be accounted for as output tax in the next period that follows the 12-month expired.
15/115 x Debt
Special rules: Installment credit agreements
Installment credit agreements encompasses:
* Suspensive sales
* Finance leases
Installment credit agreements: Time & Value of Supply
** Time of Supply:**
Earlier of time of delivery of the goods or the time any payment is received
Value of Supply:
Consideration = cash value excluding interest