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If i give 10 watches free

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If i give 10 watches...

If i give 10 watches free as a prize do i raise a tax invoice with vat or do invoice at zero

Submitted: 5 years ago.Category: Tax
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Answered in 13 minutes by:
11/12/2012
Tax Professional: Megan C, Certified Public Accountant (CPA) replied 5 years ago
Megan C
Megan C, Certified Public Accountant (CPA)
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Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Please let us know what country you are in.

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Customer reply replied 5 years ago

South africa

Tax Professional: Rachel-Mod, Moderator replied 5 years ago
Rachel-Mod
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Hello,

I’m a moderator for this topic. It seems the Professional has left this conversation. This happens occasionally, and it's usually because the Professional thinks that someone else might be a better match for your question. I've been working hard to find a new Professional to assist you with your tax question, but sometimes finding the right Professional can take a little longer than expected.

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Customer reply replied 5 years ago

hang on i paid to get an answer , please or is this site just another one of those ....

Tax Professional: Rachel-Mod, Moderator replied 5 years ago

Thank you for your patience. We will continue the search for a Professional for you.


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Tax Professional: Lev, Tax Advisor replied 5 years ago
Lev
Lev, Tax Advisor
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Hi and welcome to Just Answer!
See VAT ruling #381 - http://www.sars.gov.za/SARSCustom/VAT%20Rulings/VAT%20Rulings%20381%20-%20399.htm

While it is related to the national lottery prizes - the same tax treatment should apply.

Prize winners are not liable to account for output tax in respect of prizes received - unless they are carrying on of an "enterprise" and prizes are payments for services.

The operator of the lottery on other competition is entitled to an input tax deduction equal to the tax fraction of amounts paid out by him as prizes or winnings.

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Customer reply replied 5 years ago

Really did not answer my question which was simple , do i raise a tax invoice for the prize and pay the vat or do i send the product out at zero value and show a loss in balance sheet

Tax Professional: Lev, Tax Advisor replied 5 years ago
I think that I address your question exactly as it was asked.
Prize winners are not liable to account for output tax in respect of prizes received - unless they are carrying on of an "enterprise" and prizes are payments for services.
So - depending on your situation - if prize winners are carrying on of an "enterprise" and prizes are payments for services - you do issue a tax invoice for the prize and charge VAT, otherwise - you as an operator is entitled to an input tax deduction equal to the tax fraction of amounts paid out by you as prizes or winnings.
Please be sure to ask for clarification as needed.
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Tax Professional: Lev, Tax Advisor replied 4 years ago
The question was asked and answered long time ago.
If you have any additional details or have other tax related issues - please be sure to ask.
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