In short
- Input tax is the VAT you paid on goods and services acquired for making taxable supplies.
- You need a valid tax invoice to claim it. No valid invoice, no claim.
- Certain categories are specifically denied, including entertainment and most motor cars.
- Costs relating to exempt supplies or private use are not claimable.
- SARS, Value-Added Tax
Input VAT is the tax you paid on business purchases and can set off against the VAT you charged. It is the reason VAT registration can be worth having even when it makes you more expensive.
The three input VAT tests
- Are you a registered vendor? Only registered vendors claim input tax.
- Was it acquired for making taxable supplies? Costs relating to exempt supplies, or to private use, do not qualify. Where a cost serves both, it is apportioned.
- Do you hold a valid tax invoice? This is where most claims fail.
The third test is the practical one. A supplier's invoice missing a required field is not a valid tax invoice, and a claim made against it can be disallowed on that basis alone. It is worth checking supplier invoices when they arrive rather than at year end.
Categories that are denied
The VAT Act specifically denies input tax on certain items regardless of business purpose. The main ones:
- Entertainment, broadly meaning the provision of food, beverages, accommodation, hospitality and similar, with limited exceptions
- Motor cars as defined in the Act, which catches most ordinary passenger vehicles even where use is entirely business
- Club subscriptions of a social or recreational nature
The motor car denial surprises people every year. A bakkie used in a trade may fall outside the definition where a sedan does not, which is a distinction worth confirming before you budget for the claim.
Practical points
| Situation | Position |
|---|---|
| Supplier invoice missing your VAT number, supply over R5,000 | Not a valid full tax invoice. Ask for a corrected one |
| Cost used partly privately | Apportion. Claim the business share |
| Purchase before registration | Special rules apply. Get advice before claiming |
| Bad debt written off | Relief may be available in specified circumstances |
Common questions
Can I claim VAT without an invoice?
For supplies of R50 or less a till slip showing the VAT may be sufficient. Above that you need a tax invoice.
Can I claim on a vehicle?
Most motor cars as defined are denied. Vehicles falling outside that definition may qualify. Confirm the classification of the specific vehicle.
How far back can I claim?
There are time limits on late claims. Do not assume an old invoice can still be claimed.
Issue documents that carry every field a client needs to support their own claim.
Create a VAT-ready invoice- Value-Added Tax Act 89 of 1991, sections 16 and 17
Disclaimer: This content is for general information only and does not constitute legal, tax, accounting or financial advice. Always confirm important requirements with SARS, the relevant authority or a qualified professional.
