- Vendors can deduct VAT on previously accounted taxable supplies if written off as irrecoverable debts.
- If these debts are later recovered, vendors must repay the deducted VAT.
- Transferors of accounts receivable at face value cannot make deductions based on the transfer.
- Previously, recipients of such accounts could deduct tax amounts written off as irrecoverable without repaying if recovered.
- Section 22(2) now includes a rule for repaying these deductions if amounts are later recovered.
Source: sars.gov.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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