South Africa Journal entry for donation with VAT help!

[Keegan Hawkins]

Hi, i am required to complete general journal entries where VAT at 14% is taken in to account. the question is Donation of trade inventory with a cost of 684 to local school. is this 684 VAT inclusive or exclusive? i see it as inclusive

 

[St. Francis]

Hi, i am required to complete general journal entries where VAT at 14% is taken in to account. the question is Donation of trade inventory with a cost of 684 to local school. is this 684 VAT inclusive or exclusive? i see it as inclusive

Keegan, my view: VAT in South Africa is invoiced-based. As transaction is a donation there obviously is no invoice (no cash is involved) hence no VAT is payable. Debit PR (R684)and credit Inventory.