Page 125 - ADVANCED TAXATION - Day 1 Slides

Indemnity Payments

What is reason for this deemed supply rule?

 Insurance premiums paid under a short-term

insurance policy – vendor may claim input vat

when receive claim – has to account for output VAT

 No input/output on long-term insurance

Financial service
= exempt

No deemed supply where payments:
• Are not related to taxable supplies

• If input tax on the goods were denied (e.g.motor car)