VAT

VAT

1. Output (s.7(1)(a))

   • Person carrying on an enterprise
     • No
       • Final consumer
     • Yes
       • Supply of goods/services
         • Exempt supplies (s.12 & s.2)
           • No output tax levied
           • 1. Financial services; 2. Accommodation; 3. transport of fare-paying passengers
         • Taxable supplies (s.1 & s.7)
           • Zero-rated supplies(0%) (s.11)
             • Export of movable goods
               • Direct=supplier exports
               • Indirect= recipient exports
             • Export of services
             • Sale of going concern (criteria: both must be vendors)
           • Standard rated supplies(14%) (s.7(1)(a))
         • Deemed supplies (s.8 & s.18(3))
           • Ceasing to be a vendor: 1. Output tax payable on goods & rights owned by person also on outstanding balances owing to suppliers; 2. Value = Lesser of Cost and open-market value.
           • Indemnity payments
             • Total reinstatement of goods where Input tax denied = no supply
               • Repair of goods denied input tax = deemed supply at std
             • Replaces goods= insured not deemed to make a supply
   • Time & value of supplies (s.9 &s.10)
     • Time
       • Invoice basis: Earlier of -date of invoice issued; OR time of pmt
       • Payment basis: time of pmt
     • Value
       • Consideration = value + VAT
         • Consideration: >in money=money value;; >not money= open-market value
     • Connected persons: value= open-market value
   • Adjustments (s.18(1), (2),18A, 18B & 22(2)-(3A))

2. Input (s.17)

   • Was a vendor charged with VAT on supply of G/S by supplier? (s.1)
     • No
       • No input tax claim
     • Yes
       • Will G/S be consumed , used or supplied in course of making taxable supplies? (s.17(1))
         • No
         • Yes
           • Is deduction of input tax denied? (s.17(2))
             • Yes
             • No
               • Proposed consumption, use or supply 100% in course of making taxable supplies? (s.17(1))
                 • Yes
                   • Claim full input tax
                 • No
                   • Determine portion of use in course of making taxable supplies
                     • Intended use >95%
                       • Yes
                       • No
                         • Apportion & claim only amount of input tax that relates to intended use

3. Fixed property transactions where transfer duty payable

   • Should supplier charge VAT?/ Is supplier a vendor?
     • Yes
     • No
       • Transfer duty payable by purchaser based on purchase price
         • Is purchaser registered vendor?
           • Yes
             • Purchaser use property wholly/partially for taxable supplies?
               • No
                 • May not claim Input tax
               • Yes
                 • > Notional input tax(NIT) not limited to transfer duty; >Time = earlier of pmt / property registration; NIT only claimable to extent pmt is made
           • No

4. Adjustments

   • Due to change in use (s.18)
   • Irrecoverable debts (s.22)