Question textWhich one of the following statements regarding Output VAT and Input VAT is correct?Select one:a.Output VAT is required to be paid over to SARS, except if the customer has not yet paid for the goods or servicesb.An input VAT deduction may be claimed for a period of 5 years from the date of receipt of the tax invoicec.Output VAT is defined as the VAT incurred on the supply of goods or services to the vendord.Input VAT is defined as the tax charged in respect of the supply of goods and services by the vendorFeedback
Question
Question textWhich one of the following statements regarding Output VAT and Input VAT is correct?Select one:a.Output VAT is required to be paid over to SARS, except if the customer has not yet paid for the goods or servicesb.An input VAT deduction may be claimed for a period of 5 years from the date of receipt of the tax invoicec.Output VAT is defined as the VAT incurred on the supply of goods or services to the vendord.Input VAT is defined as the tax charged in respect of the supply of goods and services by the vendorFeedback
Solution
The correct statement regarding Output VAT and Input VAT is:
d. Input VAT is defined as the tax charged in respect of the supply of goods and services by the vendor
Explanation:
a. This statement is incorrect because Output VAT must be paid to SARS (South African Revenue Service) regardless of whether the customer has paid for the goods or services.
b. This statement is incorrect because an input VAT deduction can only be claimed within a period of 5 years from the date of the tax invoice if specific conditions are met, it's not a general rule.
c. This statement is incorrect because Output VAT is the tax charged on the value that the seller adds to the goods or services, not the VAT incurred on the supply of goods or services to the vendor.
d. This statement is correct. Input VAT is the tax charged on the goods and services that a business purchases and uses. It is charged by the vendor who supplies the goods or services.
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