When do I have to register for value-added tax (VAT) and when am I allowed to register? What are the different types of VAT supplies? What do I need to submit to South African Revenue Service? These are all common questions when we deal with VAT especially with first-time VAT vendors.
What is VAT?
VAT is an indirect tax, which is imposed on the sale or purchase of goods and services whenever a transaction is concluded between two parties. It is generally designed to tax the final consumer of goods and services with a VAT vendor acting as an agent for SARS.
VAT is levied on the supply of most goods and services including imported goods and services. VAT on imported goods is collected by customs. There is a limited range of goods and services which are subject to VAT at the zero rate or are exempt from VAT.
Exempt supplies are goods or services on which VAT is not imposed and thus excluded from the VAT regime and includes the following:
The input VAT on goods and services acquired in delivering exempt supplies will not be claimable.
A zero-rated supply is a taxable supply on which VAT is levied at the rate of 0%. Therefore, no output tax will be payable to SARS in respect of zero-rated supplies. Zero-rated supplies include:
Vendors making zero-rated supplies are entitled to claim their input tax deductions on goods or services acquired while making such taxable supplies.
Who should register for VAT?
It is mandatory for a person to register for VAT if the taxable supplies made or to be made is more than R1 million in any consecutive 12-month period.
A person/business can apply for voluntary registration even though the total value of taxable supplies is less than R1 million. A person may apply for voluntary registration if that person:
If you need any assistance with your VAT registration, processing or submissions, please contact your relationship director or Adrian de Geus at email@example.com for guidance.