n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - Value-added tax on insurance indemnity payments : and Subsection 8(8) of the Value-added Tax Act 89 of 1991 : case comments

Volume 19, Issue 4
  • ISSN : 1015-0099
  • E-ISSN: 1996-2185



This note will attempt to explain the principles relating to the payment of VAT on insurance indemnity payments, and the importance for both insured and insurance brokers to take account of VAT. It will do so with reference to Luxor v Heritage Insurance Brokers. It concerns the pressing and moot question whether an insured may recover from the insurer the VAT payable on an indemnity payment received from the latter. (It may just be mentioned in passing that as a vendor an insurer is not allowed to advertise a price (that is, an insurance premium) which does not reflect the VAT fraction or which does not stipulate that the price is not VAT inclusive (see s 65 of the VAT Act).

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