VAT on Insurance Premiums

We have received many questions about VAT on insurance premiums paid by employers for the benefit of their staff, and in particular whether they are able to claim input VAT in respect of these premiums.

In terms of Section 2(1)(i) of the Value Added Tax Act No. 89 of 1991, premiums paid under a long-term insurance policy are regarded as a financial service as defined in the Act, and are therefore exempt from VAT. No VAT can therefore be claimed in respect of these premiums.

Should you require more information, please contact your Associate or the office.

Thank you and regards,
The TSA Team

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