Telson (Pty) Ltd, a registered VAT vendor purchased 20 tractors for an amount of R175 000 (including VAT) each for resale to third parties. The owner of Telson (Pty) Ltd decided to use one of the tractors for personal use. Each tractor is normally sold for an open-market value of R 240 000 (including VAT). As at the end of the two months VAT period ended 28 February 2021, Telson (Pty) Ltd had to write off bad debts amounting to R300 000 arising from the credit sale of three tractors.

Question

What is the VAT on the bad debt written off?

A.

R45 000 - input tax

B.

R45 000 - output tax

C.

R39 130 - input tax

D.

R39 130 - output tax