Dividend Tax as opposed to Secondary Tax on Companies
April 1, 2015
ASL-Jagnaweek
May 7, 2015

VAT: Four-monthly VAT (Category F) vendors changed to bi-monthly

A4A Category F Value-Added Tax (VAT) vendor has three tax periods a year. The periods are four months each ending on the last day of June, October and February each year. A vendor falls into category F if it’s taxable supplies in a twelve-month period do not exceed R1.5 million and he applies in writing to be placed in category F.

It has now been decided to eliminate category F. All vendors that fall under this VAT category will be brought into the bi-monthly VAT category (category A or B). This change is effective 1 July 2015 and applies to tax periods commencing on or after this date.

The VAT vendors guide issued by SARS, based on the Tax Administration Laws Amendment Act 44 of 2014, which was promulgated on 20 January 2015, states the following: Category F was introduced from 1 August 2005, but very few vendors registered under this category as a result of other measures which were introduced to assist small businesses. Vendors registered under Category F will be absorbed into the bi-monthly categories (that is, either Category A or B).

Currently there are certain assumptions that will be regarded as correct unless stated differently by the South African Revenue Services (SARS). These assumptions are:

  1. All vendors will be brought into the bi-monthly VAT category B. These VAT periods are two months each, ending on the last day of August, October, December, February, April and June.
  2. SARS will automatically change the category from category F to category B, thus the VAT vendor will not be required to complete any forms to request the change.

Unfortunately any advantage that category F VAT vendors received has now been annulled by this amendment.

For any enquiries in this regard please contact Ceri-Anne Hill at Ceri-Anne@asl.co.za