Mining Giant Loses R17.5m VAT Battle Over Employee Expenses

• The Supreme Court of Appeal (SCA) ruled against a mining company, disallowing almost R17.5 million in VAT input claims for employee accommodation and food expenses.
• The company claimed the expenses were deductible as entertainment expenses, but the SCA found that they did not meet the requirements for deduction under the Value Added Tax Act.
• The company argued that the expenses were factored into tender pricing and therefore indirectly recovered from clients, but the SCA rejected this argument.
• SARS argued that the expenses were not part of the company’s ordinary business of making taxable supplies of entertainment.
• The SCA found that the company’s arguments were flawed and that the expenses were not deductible.

Source: polity.org.za

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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