When do I need a VAT264 declaration for second-hand goods?

Direct answer

Use VAT264 where a VAT vendor wants to claim notional input tax on movable second-hand goods acquired under a non-taxable supply. The form and required attachments must provide the prescribed owner, goods, consideration, and payment information. The vendor making the deduction must retain the completed declaration and attachments.

VAT264 is an evidence document. Completing it does not automatically make the purchase eligible for a notional-input claim. The transaction must still meet the applicable VAT rules.

What this means in practice

The form is designed for a vendor buying second-hand goods from an owner where the vendor intends to use the notional-input route. It can be used for registrable and non-registrable goods. It is particularly important where an invoice does not show VAT because the seller is not making a taxable supply.

The VAT264 records who supplied the goods, what the goods are, the consideration, and how the transaction was paid or dealt with as a trade-in. For an individual owner, the form calls for identity information and a copy of the identity document. For a company, close corporation, trust, or fund, it calls for the relevant official document.

The buyer should complete the evidence file at the time of purchase. Trying to reconstruct seller identity, payment references, vehicle information, or signatures after the goods have been resold is much harder and may leave the VAT claim unsupported.

Step-by-step

1. Confirm the purpose of the form.

Use VAT264 only where the vendor is considering a notional-input claim on movable second-hand goods bought under a non-taxable supply. Do not use it as a substitute for a normal VAT tax invoice.

1. Identify the owner properly.

Obtain the owner's full name and identity number where the owner is an individual. Where the owner is an entity, capture its registration details and attach the required official document.

1. Record the goods accurately.

Describe the goods, quantity, volume, or mass. Capture the make, model, registration, chassis, engine, odometer, VIN, or other identifiers where relevant.

1. Record the consideration and payment.

Enter the selling price, payment reference, and payment date. If the transaction is a trade-in, record the invoice number for the new goods purchased.

1. Complete and retain the form with attachments.

Ensure the form is completed and signed by the parties. Attach the owner documents and retain the full pack with the purchase and payment records.

1. Test the VAT entitlement separately.

Before claiming, confirm that the vendor, goods, supply, payment, and business-use facts meet the notional-input requirements. A completed VAT264 is necessary evidence in the relevant case, but it is not the whole tax analysis.

Documents and records to keep

• Completed, signed VAT264 declaration.
• Owner identity document or entity evidence required by the form.
• Purchase agreement, receipt, and payment proof.
• Goods identifiers and photographs where commercially appropriate.
• Trade-in invoice reference where applicable.
• VAT201 calculation and stock or asset record.

Important limits and exceptions

VAT264 does not apply to every second-hand purchase. It is directed at the documentary requirement for a vendor deducting notional input tax on movable second-hand goods acquired under a non-taxable supply.

The form accommodates registrable and non-registrable goods, but the evidence needed should still match the type of goods. Do not leave vehicle identifiers blank where they are available. Do not rely on a seller's verbal statement that the supply is non-taxable without the required documentary record.

Do not use VAT264 to cure an otherwise invalid deduction. The vendor must still satisfy the underlying notional-input requirements, including payment and the business purpose of the acquisition.

When to get tailored advice

Get advice where the seller is a connected person, the transaction has a trade-in or part-payment, the goods have special VAT restrictions, or the evidence cannot be obtained at the time of purchase. This is particularly important for high-value vehicles, equipment, and inventory.

TaxProof can help set up a second-hand-goods purchase file and reconcile VAT264 records to the VAT201. It cannot replace missing seller evidence after the fact.

Related TaxProof guides

• VAT input tax expenses that are not claimable
• Related upcoming guide: notional input VAT on second-hand goods, B01-BUS-003

Sources

• SARS VAT264 declaration form