Value Added Tax (VAT)

1. WHAT IS VAT?
2. HOW DOES VAT WORK?
3. WHO NEEDS TO REGISTER FOR VAT?
4. HOW TO APPLY FOR VAT?
5. HOW DO I VOLUNTARY DE-REGISTER FROM VAT?
6. WHICH VAT FORM TO USE?
7. LEGISLATION FOR VAT
8. INTERPRETATION
9. PUBLICATIONS
10. HOW TO PAY YOUR VAT
11. WANT TO SEARCH FOR A VENDOR?
12. VAT VENDOR SUSPENSION
13. FREQUENTLY ASKED QUESTIONS ON VAT
14. CONTACT US

1. WHAT IS VAT?

VAT (Value-Added Tax) is an indirect tax based on consumption of goods and services in the economy. Revenue is raised for the government by requiring certain traders or vendors to register and to charge VAT on taxable supplies of goods or services.

The essential characteristics of a VAT-type tax are as follows:
• The tax applies generally to transactions related to goods and services.
• It is proportional to the price charged for the goods and services.
• It is charged at each stage of the production and distribution process.
• The taxable person (vendor) may deduct the tax paid during the preceding stages, that is the burden of the tax is on the final consumer.

VAT is only charged on taxable supplies made by a vendor. Taxable supplies include supplies for which VAT is charged at either the standard rate or zero rate, but does not include:
• salaries and wages;
• hobbies or any private recreational pursuits (not conducted in the form of a business);
• occasional private sale of personal or domestic items;
• exempt supplies.

Please see the Comprehensive Guide for VAT (VAT404) for more information.

2. HOW DOES VAT WORK?

The South African VAT is destination based, which means that only the consumption of goods and services in South Africa is taxed. VAT is therefore paid on the supply of goods or services in South Africa as well as on the importation of goods into South Africa.

VAT is presently levied at the standard rate of 14% on most supplies and importations, but there is a limited range of goods and services which are either exempt, or which are subject to tax at the zero rate (for example, exports are taxed at 0%).

The importation of services is only subject to VAT where the importer is not a vendor, or where the services are imported for private or exempt purposes. Certain imports of goods or services are exempt from VAT.

3. WHO NEEDS TO REGISTER FOR VAT?

Persons who make taxable supplies in excess of R1 million (from 1 March 2009) in any 12-month consecutive period are liable for compulsory VAT registration, but a person may also choose to register voluntarily provided that the minimum threshold of R20 000 has been exceeded in the past 12-month period.

Persons who are liable to register, and those who have registered voluntarily, are referred to as vendors.

Vendors have to perform certain duties and take on certain responsibilities if they are registered or liable to register for VAT. For example, vendors are required to ensure that VAT is collected on taxable transactions, that they submit returns and payments on time, that they issue tax invoices where required, that they include VAT in all prices advertised or quoted etc.

For more information on tax invoices, click here.

4. HOW DO APPLY FOR VAT?

• Applications for VAT registration must be done in person so that SARS can verify identity and other application details;
• Please complete this form to apply for VAT - VAT 101 - Application for VAT Registration.To assist you in completing the form, please see the Guide for Completion of VAT Registration Application Forms (AS-VAT-08). Please note the supporting documentation that you have to take with you - it is specified on the application form. If you want to apply for the Small Retailers VAT package, please complete the following form, to see whether you qualify for this package please see the requirements on the form itself - Application for registration for Small Retailers (VAT SRVP1).
• Please see a list of our SARS branches to locate your nearest branch.

5. HOW DO I VOLUNTARY DE-REGISTER FROM VAT?

 You must inform the SARS branch office where you are registered in writing by submitting:

The VAT123 form (VAT cancellation only) OR
if you want to apply for Turnover Tax then please complete the Turnover Tax Application Form (TT01). This form includes the simultaneous cancellation of VAT.

For more information on VAT cancellation, click here.

6. ALL THE VAT FORMS

For a comprehensive list of VAT forms, please click here.

7. LEGISLATION FOR VAT

            Act

• Value-Added Tax Act NO.89 of 1991(as amended) 

            Regulations

• Regulations and Government Notices for VAT

8. INTERPRETATION

Draft Interpretation Notes have been moved to Legal & Policy.  Please use this link: Draft Interpretation Notes or use the blue horisontal navigation pane on top of the page to go to the Legal & Policy area

• Interpretation Notes for VAT
• VAT Practice Notes
• VAT Rulings
• International Treaties

9. PUBLICATIONS

           Guides

• VAT 411 - Guide for Entertainment Accommodation and Catering
• Quick reference handbook - Small retailers VAT package
• VAT416 - Guide for the Small Retailers VAT Package
• AS-VAT-DR-02 - Completion of VAT 201 for Diesel Refunds
• AS-VAT-DR-03 - Quick Reference Guide to Diesel Biodiesel Refund - 01 October 2008  
• VAT 403 - Trade Classification
• VAT 404 - Guide for Vendors
• VAT 412 - Share Block Schemes
• VAT 413 - Deceased Estates
• VAT 414 - Guide for Associations not for Gain and Welfare Organisations
• VAT 417 - Small Vendors
• VAT 418 - Guide for Diplomatic Missions, Consular Posts and Intenational Organisations
• VAT 409 - Guide for Fixed Property and Construction
• VAT 420 - Guide for Motor Dealers
• AS-VAT-09 - Registration of VAT Vendors - Frequently Asked Questions
• VAT 419 - Guide for Municipalities
• AS-VAT-08 - Guide for Completion of VAT Registration Application Forms
• Quick Reference Guide to Diesel Refund 
  

            VAT News

•  All the VAT News

10. HOW TO PAY YOUR VAT

There are several ways to make your VAT payment, you may:

• Pay through the post.
• Pay at SARS cash office.
• Pay by electronic funds transfer (EFT): Debit Orders, eFiling and Internet Banking.
• Pay at various banks.

For more information on the above payment methods, please see our Guide for Vendors and scroll to page 53. For additional information on electronic payments: see the Electronic Payers Notice in either English  or Afrikaans and Information on electronic payments to SARS.

11. WANT TO SEARCH FOR A VENDOR?

Please click here if you want to search for a vendor.


12. VAT VENDOR SUSPENSION

VAT vendors who do not meet certain requirements of the VAT Act are to have their registrations suspended. Specifically affected are:

• VAT vendors who have failed to submit any VAT returns (VAT 201) for the past five years. 
• VAT vendors whose VAT 201 returns for the last 12 months reflect a liability of zero i.e. these returns show no evidence of taxable supplies being made.

Vendors that meet these criteria will be informed by letter of the suspension of their registration with immediate effect.  These businesses will no longer receive VAT return forms and may no longer make use of their VAT vendor number. They will be audited and a formal deregistration process will be followed in order to take them off the VAT register.

13. FREQUENTLY ASKED QUESTIONS FOR VAT

• Questions on Registration
• Questions on Tax Invoices

14. CONTACT US

• By phone 0800 00 7277.
• By fax 021-413 8902.
• By email vat.wc@sars.gov.za. 
• Or visit your nearest SARS Branch.

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