Page 19 - P6 Slide Taxation - Lecture Day 3 - VAT Part 2

12.2.1. Deemed supply: Indemnity payment [s 8(8)]

Must charge output VAT on amount:

• received as claim under contract of insurance; or

• paid to another person under a contract of insurance that

indemnifies the vendor.

No deemed output VAT if:

• payment does not relate to taxable supplies (14% or 0%) or

• total reinstatement of goods for which an input tax deduction

was denied and such goods are stolen or damaged beyond

economic repair (e.g. “motor car” stolen or goods used for

entertainment).