Tax Court Clarifies Input VAT Deduction Rules for Liability Insurance Premiums in South Africa

• The South African Revenue Service posted a Tax Court judgment for Case No. VAT 22558 on April 9.
• The case clarified input VAT deduction rules for liability insurance premium payments.
• The taxpayer was a legal practitioner fund reimbursing the public for attorney theft.
• The taxpayer deducted input VAT for professional indemnity insurance premium payments.
• Initially, the Tax Agency allowed deductions for two periods but later disallowed all four after an audit.
• The Tax Agency argued that the insurer provided no services to the taxpayer.
• On appeal, the Tax Court found the Tax Agency had a duty to specify disputed documents.
• The Tax Agency failed to request invoices when reversing the deductions.
• The Tax Agency did not originally argue that the taxpayer failed to submit invoices under Section 16(2).

Source: news.bloombergtax.com

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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