QUESTION 3 [30 MARKS]

Big Bang (Pty) Ltd is resident company that sells telescopes. The company has a 31 December year end and is registered category B VAT vendor (tax periods ending on February, April, June, etc). All amounts include VAT (if applicable) and all parties involved are registered VAT vendors, unless specifically stated otherwise.

The following are transactions relate to the VAT period ending December 2022:

o Salaries paid R115,400

o Insurance costs R35,000

o Fuel on delivery vehicle R15,000

o Purchased second hand machine to be used in production from non-vendor R305,000

o Purchased packing material R102,000

o Sales: Local R615,000

o Export R415,000

o Bank Charges R6,800

o Interest on positive balance R22,300

o Donation to a public benefit organisation R88,600

3.1 Calculate the VAT payable or refundable. Show Input and Output amount separately. Where the amount has nil effect indicate the reason. (15)

3.2 Calculate tax liability of Big Bang for the year ended 31 December 2022. Where the amount has nil effect indicate the reason. (15)