Updated VAT Rules: Repayment Required for Recovered Irrecoverable Debts by Account Receivable Recipients

• 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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