Page 105 - ADVANCED TAXATION - Day 1 Slides

Solution

105

(a) ABC CC will be required to account for output tax equal to the

notional input tax claimed of R737. The output tax is based on the

purchase price, irrespective of the selling price.

(b) ABC CC will again be required to account for output tax equal to

R737, although the selling price of the goods is less than the purchase

price. The output tax is based on the original purchase price, irrespective

of the selling price.