Page 134 - P6 Slide Taxation - Lecture Day 5 - VAT Part 1

Solution

Step 1: R160 000 (determined value already excludes VAT)

Step 2: R160 000 × 0,3% = R480

Step 3: R480 – R150 (insurance) – R70 (maintenance) = R260

 The fuel (zero-rated), interest (exempt), and fixed cost (input tax

denied) are not deductible.

Step 4: R260 × 15/115 = R33,91

Step 5: R33,91 × 100% = R33,91 output tax per month payable by

the employer on the fringe benefit

 Additional output tax on consideration received:

The employer must also account for output tax on the
consideration paid by the employee to the employer in respect of

the insurance and maintenance. (The employer probably claimed

the VAT on these expenses paid by him.)

R150 + R70 = R220 × 15/115= R21,29 output tax