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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 SUBMIT A RETURN FOR VAT?
6. HOW DO I VOLUNTARY DE-REGISTER FROM VAT?
7. WHICH VAT FORM TO USE?
8. LEGISLATION FOR VAT
9. INTERPRETATION
10. PUBLICATIONS
11. HOW TO PAY YOUR VAT
12. WANT TO SEARCH FOR A VENDOR?
13. VAT VENDOR SUSPENSION
14. FREQUENTLY ASKED QUESTIONS ON VAT
15. CONTACT US
NEW ! Introduction of the new Value-Added Tax (VAT) return for the remittance of VAT (VAT 201) form
SARS made changes to the VAT 201, specifically aimed at addressing the declaration and payment of VAT in respect of the import and the export of goods.
However, if you have already completed and saved your VAT 201 on your eFiling profile, the form will be automatically updated to include the new fields. This means that you will not lose the information which you have saved, and you need only complete the new fields if they apply to you.
The changes to the VAT 201 will impact all vendors, specifically vendors involved in the import and export of goods. These vendors will now be required to indicate separately on their declarations all transactions involving the import and the export of goods. This requirement will serve to inform and enhance SARS’s risk assessment across the different taxes administered by SARS. The new VAT 201 form will include:
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A field (Field 2A) indicating zero-rated supplies of all goods exported from the Republic of South Africa.
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A field (Field 14A) for the calculation of input tax that applies to capital goods imported in respect of which a valid release document is held.
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A field (Field 15A) for the calculation of input tax that applies to non-capital goods imported in respect of which a valid release document is held.
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A Customs Code which will serve as the exporter’s/importer’s code, linking the information declared for Customs purposes to the information declared for VAT purposes.
Kindly note that in the event of field 2A, 14A and 15A having been completed, it will be mandatory to fill in your Customs Code.
To find out more about these changes, click here to view a letter sent to taxpayers in April 2010, and click here to view a draft copy of the new form. Please note that the new form will only be obtainable from a SARS Branch.
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) in the Value-Added Tax (VAT) category on the Legal and Policy site
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 R50 000 (from 1 March 2010) 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.
More information on tax invoices
4. HOW DO I APPLY FOR VAT?
Applications for VAT registration must be done in person in order for SARS to verify identity and other application details. The form VAT 101 - Application for VAT Registration needs to be completed and be submitted to SARS together with the supporting documents specified therein.
For assistance, please consult the Guide for Completion of VAT Registration Application Forms (AS-VAT-08).
New announcement:
The Small Retailers VAT package (SRVP) has been withdrawn with effect from 1 March 2010.
Please see Government Notice R.169 published in Gazette 32994 on the Legal and Policy site.
Please see a list of our SARS branches to locate your nearest branch.
5. HOW DO I SUBMIT A RETURN FOR VAT?
SARS is making changes to the VAT 201 which will be introduced shortly. To find out more about these changes, click here to view a letter sent to taxpayers in April 2010, and click here to view a draft copy of the new form. Please note that the current form and the new form after it has been implemented will only be obtainable from a SARS Branch.
6. 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.
7. ALL THE VAT FORMS
For a comprehensive list of VAT forms, please click here.
8. LEGISLATION FOR VAT
9. INTERPRETATION
Interpretation & Rulings publications are now located on the Legal & Policy site. The links are provided below for ease of reference
10. PUBLICATIONS
SARS has several publications focusing on Value-Added Tax (VAT).
Brochures and Guides
The latest updated Brochures and Guides are located on the Legal & Policy website, where they have been categorised
according to tax types for ease of reference.
In order to access the latest versions of the following publications, please go to the category named Value-Added Tax (VAT):
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VAT 403 - Trade Classification
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VAT 404 - Guide for Vendors Updated on 30 March 2010
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VAT 409 - Guide for Fixed Property and Construction
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VAT 411 - Guide for Entertainment Accommodation and Catering
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VAT 412 - Share Block Schemes
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VAT 413 - Deceased Estates
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VAT 414 - Guide for Associations not for Gain and Welfare Organisations Updated on 30 March 2010
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VAT 416 - Guide for the Small Retailers VAT Package (Withdrawn – see Notice No. R169) -
VAT 419 - Guide for Municipalities
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VAT 420 - Guide for Motor Dealers
In order to access the latest versions of the following publicationsplease see our All Publications>VAT documents.
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AS-VAT-DR-02 - Completion of VAT 201 for Diesel Refunds
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AS-VAT-DR-03 - Quick Reference Guide to Diesel Biodiesel Refund
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AS-VAT-08 - Guide for Completion of VAT Registration Application Forms
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AS-VAT-09 - Registration of VAT Vendors - Frequently Asked Questions
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AS-VAT-10 - Small Vendors
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AS-VAT-02 – Quick Reference Guide on Diplomatic Refunds
VAT News
11. HOW TO PAY YOUR VAT
There are several ways to make your VAT payment, you may:
For more information on the above payment methods, please see page 53 of the Guide for Vendors. For additional information on electronic payments, see the Electronic Payers Notice in either English or Afrikaans and Information on electronic payments to SARS.
12. WANT TO SEARCH FOR A VENDOR?
Please click here if you want to search for a vendor.
13. 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.
14. FREQUENTLY ASKED QUESTIONS FOR VAT
15. CONTACT US
Click here for our contact details.
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