VAT

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VAT
VAT

[ht_message mstyle=”alert” title=”” show_icon=”true” id=”” class=”” style=”” ]According to a report, VAT is expected to increase by 1%.[/ht_message]

 

VAT
VAT

VAT stands for Value-Added Tax and it has always been regarded by its abbreviation ‘VAT’ which is an indirect tax through the consumption of goods and services in our economy.  VAT funds or the revenue thereof is raised by certain businesses for the government. Eligible businesses should register and charge Value-Added Tax on taxable supplies of goods and services.

In essence, businesses have become vendors that act as government agents for VAT collection. During the production and distribution process, VAT is charged at each stage. A VAT is directly proportional to the price charged for the goods and services.

What is the current VAT rate?

[ht_message mstyle=”info” title=”” show_icon=”true” id=”” class=”” style=”” ]15% – effective from 1 April 2018[/ht_message]

The current VAT rate in South Africa for 2019 is 15%. It has increased by 1% from 1 April 2018. It can be charged for some goods and services as well as good imports.  (However, when it comes to VAT and importation – the levy is handled by customs (learn more))

[ht_message mstyle=”alert” title=”” show_icon=”” id=”” class=”” style=”” ]Certain goods are subject to VAT exclusion or exempt from VAT.[/ht_message]

VAT Registration

When you run a business, you may register for VAT. There are different types of taxes, and you are allowed to register for any of the different types and or register for different tax types using the SARS client information system.

By “YOU”, can include but not limited to individuals, trust funds, partnerships, foreign donor-funded projects, and municipalities.

[ht_message mstyle=”success” title=”” show_icon=”true” id=”” class=”” style=”” ]iRead: Tax Rates[/ht_message]

You must complete a form, and there’s a specific procedure for the process that must be followed to complete a VAT registration process.

Should the taxable supplies made exceed R50 000 within a year (12 months period), you can choose to register voluntarily. Small businesses that are registered for Turnover Tax may also choose to register for VAT when voluntarily registration conditions are met. You are referred to as a vendor when you have obliged to register for VAT.

Submitting VAT Returns

When you are obliged to register and charge for tax as a Vendor, you are required, by law, to submit your VAT returns and make payments of the VAT liabilities within the tax period allocated for you. You may submit VAT returns and pay on or before the 25th day after the end of the tax period.

[ht_message mstyle=”danger” title=”Late Submissions” show_icon=”true” id=”” class=”” style=”” ]As per usual, late submissions will result in penalties and interest.[/ht_message]

[ht_message mstyle=”info” title=”” show_icon=”” id=”” class=”” style=”” ]

 

Payment method​ Return due date​ Payment due date​
​Payments at ABSA, Albaraka Bank Limited, Grobank Ltd (previously Bank of Athens), FNB, HBZ Bank LTD, Nedbank and Standard Bank. ​25th ​25th
​Electronic Fund Transfers (including internet banking) ​25th ​25th
​eFiling of return and payment via either SARS eFiling or Electronic Funds Transfers (internet banking) ​Last business day ​Last business day

 

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Vendors using the eFiling system may continue to use it to submit VAT declarations on the 25th of the month. Should the declaration and payments be submitted via eFiling, EFT on or before the last business day of the month, the benefit of no interest, penalties or prosecution will remain effective. In order for one to access older VAT-Related documents can be found in the Legal & Policy Archive.

 Added Information

[ht_message mstyle=”info” title=”” show_icon=”” id=”” class=”” style=”” ]

  • Vendors making taxable supplies of more than R50 000 but less than R1 million per annum may apply for voluntary registration.
  • For Questions email VATRateEnquiries@sars.gov.za
  • The 14% tax rate has been effective until 31 March 2018
  • You can still be able to trade while waiting for VAT Registration Number
  • Vat is calculated by Deducting input tax from output tax liability which will result in VAT payable or refund

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