Many businesses enter into agreements with telecommunication service providers to make mobile phones (“Phones”), airtime (“Airtime”) (i.e. call minutes) and data packages (“Packages”), available to their employees to perform their roles outside the office hours or at locations away from the office. Due to COVID-19, there has been an increase in work-from-home arrangements, resulting in some instances where employers pay for Phones, Airtime, and Packages’ expenses to allow employees to perform their roles remotely.

Due to the potential private use of Phones, Airtime, and Packages, there has been uncertainty as to whether a business is entitled to recover the related input tax and, if so, what the requirements are to be entitled to input tax recovery.

This Public Clarification provides guidance on the application of the VAT legislation in respect of the recovery of input tax incurred on Phones, Airtime, and Packages acquired for business use.

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