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What expenses can I claim as input VAT?

Persons that are not registered as an exempt person and sell taxable or exempt with credit supplies may claim back input tax on expenditure.

A person who sells a mixture of taxable, exempt with credit and exempt without credit supplies must apply partial attribution. The rate of attribution is calculated annually and it is determined by value of supplies whose credits are allowed as a ratio of all supplies. The rate is definitive for that particular year, and also applies provisionally for the subsequent year.

The VAT Act does not permit that VAT is claimed on the following expenditure:

  • Tobacco or tobacco products unless purchased for resale
  • Alcoholic beverages, unless purchased for resale
  • Works of art and antiques
  • Motor vehicles, vessels or aircraft, excluding vessels and aircraft acquired for the purpose of being provided under a charter or hire agreement, unless purchased for resale or unless acquired and used for the purpose of the carriage of goods or passengers for a consideration.
  • Goods and services for the purpose of repairing, maintaining and keeping motor vehicles, vessels or aircraft and fuel used therein.
  • Car leasing by a lessee, including VAT incurred on fuel
  • Goods and services used in the provision of receptions, entertainment or hospitality except where that supply is made in the normal course of an economic activity
  • Goods and services used in the provision by a person to his employees of transport or entertainment, except where the transport is provided on vehicles with a seating capacity of not less than seven.

Accountants and other professionals cannot claim back VAT incurred on the purchase of motor vehicles or VAT paid on fuel.