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South Africa VAT Regulations

What is Value Added Tax?

Value Added Tax (VAT) is an indirect taxation on consumption of goods and services in the economy. This means that the Government raises revenue by requiring specific traders/vendors to register and charge VAT on taxable supplies of goods or services.

How it works is simple. It is a 14% charge on most supplies and importations with a limited range of exempted services or goods (these excepted services or goods would be charged at 0%). Only the consumption of goods and services in South Africa is taxed with VAT.

To qualify to register for VAT you need to make taxable supplies in excess of R1 million in a 12 month period (consecutive). If this is the case it is compulsory that you register for VAT. You may also to voluntarily register for VAT provided that the minimum threshold of R50 000 has been exceeded in the past 12 month period.

Vendors (persons who have either voluntarily registered / have been liable to register) have to take on certain responsibilities relating to VAT. They need to ensure that VAT is collected on taxable transactions and submit returns and payments on time. VAT needs to be included on issued tax invoices and VAT must be included in all quotations and advertisements.

You can make your VAT payments by using one of the following channels:

  • Post
  • SARS branches
  • Electronic Funds Transfer (EFT; Debit Order and eFiling
  • Various banks

SARS has payment rules and reference guides for easy reading and to ensure that you comply with their requirements.

Applications for VAT registration must be done in person in order for SARS to verify and confirm application details and Identification documentation.

For detailed assistance there is a Guide for Completion of VAT Registration Applications Form – it would be wise to read this in detail so that you know the ins and outs of VAT Registration.

From a legal perspective; SARS has available on their website VAT Legislation - Value-Added-Tax Act No 89 of 1991 (as amended); and Regulations and Government Notices for VAT. Once again it would be wise to read this in detail. They have other documentation available for reading which include (but limited to) the Interpretation and Rulings and easy reference links.

SARS website also supplies you with easy access to the VAT forms; VAT brochures and guides and VAT publications.

With this type of on-line support it is easy to become registered and compliant with all the VAT related requirements.