Input VAT Apportionment

Most South African businesses are well aware of the obligation to apportion input tax credits where non-taxable supplies and/or exempt supplies are made in addition to normal taxable supplies. The turnover method however is, in most cases, the only approved method to apportion input tax credits. The turnover method is often not beneficial and does not fairly reflect the extent to which expenses are incurred for the purpose of making taxable supplies. Several other methods exist and where approval has been obtained from SARS for such alternative method.