South Africa Tax Agency Posts Tax Court Judgment on Input VAT Deductions for Mixed-Supply Entities

The South African Revenue Service Feb. 13 posted online the Tax Court Judgment for Case No. VAT 22402, on VAT liability and input VAT deductions for entities with mixed supplies. The taxpayer, after obtaining a VAT class ruling (VCR) allowing differentiation of input VAT for research activities with a maximum deduction cap of 12.5 percent, entered into a lease agreement for a student residence. The taxpayer claimed the lease was a taxable supply, deducted input VAT, and challenged the 12.5 percent cap. The Tax Agency disallowed the deduction, stating the agreement constituted an exempt supply of accommodations. The Tax Court ...