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Calculation of Transfer duty as a deemed VAT input

Posted 20 September 2015 under Tax Questions


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Anna says:
11 September 2015 at 14:10

How am I supposed to calculate the VAT input claim on a fixed property bought for R850 000?

The purchaser paid R3000 transfer duty to the seller. According to the articles I read online, the purchaser may claim the transfer duty as a VAT input. But now I'm confused as to what exactly the amount should be. May he claim R104 385.96 (R850 000 x 14/114) AND R3000 as a VAT input, or only R3000 as a input?

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TaxTimTaxTim says:
14 September 2015 at 8:14

Are you a registered VAT Vendor?


Anna says:
14 September 2015 at 8:38

The purchaser of the property is a registered VAT vendor, the seller not.


TaxTimTaxTim says:
15 September 2015 at 20:51

It is an either or, there cannot be both a VAT claim and a Transfer Duty claim.


Anna says:
16 September 2015 at 8:14

The purchaser will not be claiming both transfer duty and VAT, only the deemed VAT input.

I want to know how I calculate the deemed VAT input.

If the purchase price for the property was R850 000 and the transfer duty paid was R3 000, what is the amount of the deemed VAT input?


TaxTimTaxTim says:
20 September 2015 at 16:38

If the seller is a vendor and has sold the property as part of the business activity then they would claim the deemed input of R850 000 x 14/114 and not be able to claim the Transfer Duty. He should not have paid the Transfer Duty though.


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