South Africa Tax Agency Posts Decision Explaining Deductibility of Input VAT on Entertainment Expenses

The South African Revenue Service March 28 posted online Supreme Court of Appeal Decision No. 1192/2023, explaining the deductibility of input VAT on entertainment expenses under Section 17(2)(a)(i)(bb) of the VAT Act. The taxpayer was engaged in mining shaft sinking and construction activities for various clients. The taxpayer sought an input VAT deduction on accommodations and food provided to employees working on specific projects, and the Tax Court denied the deduction. In dismissing the taxpayer’s appeal, the Supreme Court of Appeal found that: 1) input VAT on accommodations and food, which are considered entertainment expenses, is generally not deductible unless ...