Daffodils Motors (Pty) Ltd, a motor dealer in South Africa, purchased second-hand moveable goods, a blue Nissan X-Trail, from a non-vendor for R11 500. The company is a registered VAT vendor. The company intended to sell the Nissan in South Africa within a week. After numerous attempts to sell the Nissan in South Africa, the company decided to export the vehicle as second-hand moveable goods to Zimbabwe. The company decided that a markup of R3 500 (excluding VAT) is enough to export this Nissan to Zimbabwe.
SARS’s VAT404 guide indicates that where second-hand goods are acquired from a registered vendor under a taxable supply, notional input tax is not deducted, but rather a normal input tax deduction supported by a tax invoice.
Daffodils Motors (Pty) Ltd’s bookkeeper does not fully understand the current VAT legislation and asked you to advise him on the VAT implications.

Required:
Where applicable, show all calculations.
1.1. Will the company be allowed to claim a notional input tax on the second-hand moveable goods to be exported? In your own words, explain to the bookkeeper all the VAT implications for this export?
1.2. If the company can claim a notional input tax, then calculate the notional input tax on the acquisition of a second-hand motor vehicle from a non-vendor?
1.3. Calculate the export selling price, VAT included, of the Nissan?
1.4. What consideration information must be stated on the tax invoice to be sufficient in terms of the legislation?

find attached below tax guides and tables:

Transcribed Image Text:

ANNEXURE A TAX RATES FOR INDIVIDUALS AND SPECIAL TRUSTS For year of assessment from 1 March 2020 to 28 February 2021 Taxable income (R) 0 - R205 900 R205 901 - R321 600 R321 601 - R445 100 R445 101 R584 200 R584 201 - R744 800 R744 801 - R1 577 300 R1 577 301 and above TAX REBATES: INDIVUDUALS Amounts deductible from tax payable Persons under 65- Primary rebate Persons 65 and under 75 - Secondary rebate Persons 75 and over - Tertiary rebate TAX THRESHOLDS: INDIVIDUALS Age Below age 65 Age 65 to below 75 Age 75 and over EXEMPTIONS: INDIVIDUALS SA sourced interest received by natural persons Persons under 65 years Persons 65 years and older Rate of tax (R) 18% of taxable income R37 062 +26% of taxable income above R205 900 R67 144 +31% of taxable income above R321 600 R105 429 + 36% of taxable income above R445 100 R155 505 + 39% of taxable income above R584 200 R218 139 + 41% of taxable income above R744 800 R559 464 + 45% of taxable income above R1 577 300 DEDUCTIONS: TRAVEL EXPENSES DEEMED EXPENDITURE - 2021 Value of the vehicle (including VAT) (R) 0-R95 000 R95 000 R190 000 R190 000 - R285 000 R285 000 - R380 000 R380 000 - R475 000 R475 000 - R570 000 R570 000 - R665 000 exceeding R665 000 - Fixed cost (R p.a.) R31 332 R55 894 R80 539 R102 211 R123 955 R146 753 R169 552 R169 552 2021 R14 958 R8 199 R2 736 Tax threshold R83 100 R128 650 R143 850 Fuel cost (c/km) 105.8 118.1 128.3 138.0 147.7 169.4 175.1 175.1 Exemption R23 800 R34 500 Maintenance cost (c/km) 37.4 46.8 51.6 56.4 66.2 77.8 96.6 96.6 ANNEXURE A TAX RATES FOR INDIVIDUALS AND SPECIAL TRUSTS For year of assessment from 1 March 2020 to 28 February 2021 Taxable income (R) 0 - R205 900 R205 901 - R321 600 R321 601 - R445 100 R445 101 R584 200 R584 201 - R744 800 R744 801 - R1 577 300 R1 577 301 and above TAX REBATES: INDIVUDUALS Amounts deductible from tax payable Persons under 65- Primary rebate Persons 65 and under 75 - Secondary rebate Persons 75 and over - Tertiary rebate TAX THRESHOLDS: INDIVIDUALS Age Below age 65 Age 65 to below 75 Age 75 and over EXEMPTIONS: INDIVIDUALS SA sourced interest received by natural persons Persons under 65 years Persons 65 years and older Rate of tax (R) 18% of taxable income R37 062 +26% of taxable income above R205 900 R67 144 +31% of taxable income above R321 600 R105 429 + 36% of taxable income above R445 100 R155 505 + 39% of taxable income above R584 200 R218 139 + 41% of taxable income above R744 800 R559 464 + 45% of taxable income above R1 577 300 DEDUCTIONS: TRAVEL EXPENSES DEEMED EXPENDITURE - 2021 Value of the vehicle (including VAT) (R) 0-R95 000 R95 000 R190 000 R190 000 - R285 000 R285 000 - R380 000 R380 000 - R475 000 R475 000 - R570 000 R570 000 - R665 000 exceeding R665 000 - Fixed cost (R p.a.) R31 332 R55 894 R80 539 R102 211 R123 955 R146 753 R169 552 R169 552 2021 R14 958 R8 199 R2 736 Tax threshold R83 100 R128 650 R143 850 Fuel cost (c/km) 105.8 118.1 128.3 138.0 147.7 169.4 175.1 175.1 Exemption R23 800 R34 500 Maintenance cost (c/km) 37.4 46.8 51.6 56.4 66.2 77.8 96.6 96.6

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11 The company will not be allowed to claim a notional input tax on the secondhand moveable goods to ... View the full answer