Page 158 - ADVANCED TAXATION - Day 1 Slides

Solution

Output tax adjustment is equal to the tax fraction multiplied

by open-market value 221,05

= 14/114 × R1 800

If Fanie originally acquired the lawnmower for making only

55% taxable supplies, the VAT consequences would have
been as follows:

Output tax = 14/114 × R1 800 (s 18(1)) 221,05

Input tax = 14/114 × R1 000 × 45% (non-taxable use) (s
16(3)(h)) 55,26