Value Added Tax (VAT)
Value Added Tax (VAT)
What is it?
According to the SARS website (articles combined and lightly edited for accuracy, clarity, emphasis, and spelling):
Value Added Tax is commonly known as VAT. VAT is an indirect tax on the consumption of goods and services in the economy. Revenue is raised for the government by requiring certain businesses to register and charge VAT on the taxable supplies of goods and services. These businesses become vendors that act as the agent for the government in collecting the VAT.
VAT is charged at each stage of the production and distribution process and it is proportional to the price charged for the goods and services.
VAT increased from 14% to 15% from 1 April 2018. VAT is levied on the supply of most goods and services and the importation of goods. Customs collect the VAT on the importation of goods. There is a limited range of goods and services subject to VAT that is zero-rated or exempt from VAT.
Who should register for VAT?
Any person that carries on business may register for VAT. You can register once for all different tax types using the client information system. The term “person” is not limited to companies and includes, amongst others, individuals, partnerships, trust funds, foreign donor-funded projects, and municipalities.
To register, a person must complete an application form, and a specific process must be followed, both of which you can find on our page how to register for VAT. A person must register for VAT if the taxable supplies are made or made above R1 million in any consecutive twelve-month period.
SARS will issue a VAT reference number immediately to all applicants who applied through eFiling or walk-in channel if no risk has been identified. A person can submit the requested supporting documents through eFiling, SARS website online query system, or walk-in channel, latter by appointment only. See the updated guide for info (W.e.f 25 May 2020).
A person may also voluntarily register if the past twelve months’ taxable purchases exceeded R50 000. As of the 1st of March 2012, qualifying micro-businesses registered for Turnover Tax may also choose to register for VAT provided that all the conditions for voluntarily registration for VAT are met. A person who is obliged to register for VAT is referred to as a vendor.
When should I submit returns and make payments?
A vendor must submit VAT returns and make payments of the VAT liabilities (or claim a VAT refund) under the tax period allocated to the vendor. The VAT returns and payments are normally submitted/made on or before the 25th day after the tax period. Late payments of VAT will attract a penalty and interest.
Value Added Tax – Onestop Accounting
Onestop Accounting has years of experience submitting VAT returns and dealing with VAT refund queries/audits in an ever-changing environment where SARS prioritises tax compliance and revenue collection.
Contact Onestop Accounting if you need assistance in submitting VAT returns and or VAT refunds.