VAT

What is new?

 
9 September 2019 - New VAT216 form available
A new VAT216 form, Record in respect of goods sold towards satisfying a debt of the owner of the goods, has been published and should be completed and retained for all payments related to goods sold to satisfy the debt of the owner of the goods, as envisaged in section 29 of the Value-Added Tax Act, 1991.  

The VAT216 form is updated to automatically apply the applicable tax fraction to the selling price, inclusive of VAT, dependent on the date of the sale. For example, if goods were sold before 1 April 2018, the tax fraction of 14/114 will be applied. 
 
Set-off of refunds between main account and sub accounts for VAT

SARS has implemented an improved VAT refund process in line with legislative changes which saw the new section 50(70) incorporated into the VAT Act No. 89 of 1991.

From September 2019, taxpayers will be able to use a VAT refund from the main account of an enterprise to pay the VAT debt of another sub-account or branch of the enterprise.

If you have a VAT refund due on the main or sub-account, it can be used as follows:
  • The main enterprise can set-off  an outstanding tax debt of another branch
  • The branch account can be set-off against an outstanding tax debt of the main enterprise or an outstanding tax debt of another branch.

Once the set-off has been successfully completed, a Notice of Refund VAT222 will be issued indicating the tax period(s) of the payment, VAT registration number, tax debt to be paid, refund set-off, and the account reference numbers from which the refund was made.

 
21 February 2018 - Budget 2018 announcement
VAT is now levied at the standard rate of 15% on the supply of goods and services by registered vendors. The tax rate was 14% until 31 March 2018.

A vendor making taxable supplies of more than R1 million per annum must register for VAT. A vendor making taxable supplies of more than R50 000 but not more than R1 million per annum may apply for voluntary registration. Certain supplies are subject to a zero rate or are exempt from VAT.

For more information on the impact of the VAT increase, see the:
Please note: The VAT guides and other published documents will be reviewed on an ongoing basis to update the reference to the changed VAT rate (where applicable) in addition to updating specific areas where tax certainty/clarity is needed or where the legislation has changed warranting a substantial updating of the document. Documents that are more general in nature such as the VAT 404 Guide for Vendors will be prioritised for updating as soon as possible.

These documents can still be relied upon, and reference to the 14% VAT rate must be substituted with the increased rate of 15% where applicable and read within the context of the reference.

Until the prioritised documents are updated, the Frequently Asked Questions (FAQs) and related answers will be the primary information source in relation to the VAT rate increase. If your particular question is not addressed in the FAQ document, you can direct that question to VATRateEnquiries@sars.gov.za.



What is VAT?

Value-Added Tax is commonly known as VAT. VAT is an indirect tax on the consumption of goods and services in the economy. Revenue is raised for government by requiring certain businesses to register and to charge VAT on the taxable supplies of goods and services. These businesses become vendors that act as the agent for government in collecting the VAT.

VAT is charged at each stage of the production and distribution process and it is proportional to the price charged for the goods and services.

VAT increased from 14% to 15% from 1 April 2018. VAT is levied on the supply of most goods and services and on the importation of goods. The VAT on the importation of 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.

Who should register for VAT?

Any person that carries on a business may register for VAT. You can register once for all different tax types using the client information system. The term person is not only limited to companies but also includes, amongst others, individuals, partnerships, trust funds, foreign donor funded projects and municipalities. In order to register, an application form must be completed and a specific process must be followed, both of which you can find on our page how to register for VAT.
 
It is mandatory for a person to register for VAT if the taxable supplies made or to be made is, in excess of R1 million in any consecutive twelve month period.
 
A person may also choose to register voluntarily if the taxable supplies made, in the past period of twelve months, exceeded R50 000. As from the 1st of March 2012, qualifying micro businesses that are registered for Turnover Tax may also choose to register for VAT provided that all the conditions for voluntarily registration for VAT are met.
 
A person who is obliged to register for VAT is referred to as a vendor.

When should I submit returns and make payments?

A vendor is required to submit VAT returns and make payments of the VAT liabilities (or claim a VAT refund) in accordance with the tax period allocated to the vendor. The VAT returns and payments are normally submitted / made on or before the 25th day after the end of the tax period. Late payments of VAT will attract a penalty and interest.

Payment method​ Return due date​ Payment due date​
​Payments at ABSA, Albaraka Bank Limited, Grobank Ltd (previously Bank of Athens), FNB, HBZ Bank LTD, Nedbank and Standard Bank. ​25th ​25th
​Electronic Fund Transfers (including internet banking) ​25th ​25th
​eFiling of return and payment via either SARS eFiling or Electronic Funds Transfers (internet banking) ​Last business day ​Last business day

Top Tip: On 19 October 2012, SARS clarified in a notice that vendors who use eFiling may continue to submit their VAT declarations on the 25th of the month. The benefit of no interest, penalties or prosecution will remain effective if the declaration and payment are submitted via eFiling (or EFT) on or before the last business day of the month.

How do I access older VAT-related documents?

The SARS website does not host old or withdrawn documents, except for those owned by Legal & Policy, for example earlier published Proclamations, Regulations and Government Notices, as well as the archived VATNews copies.
The VATNews copies can be found in the Legal & Policy Archive, which has been made available for research and reference purposes.
 
To access this page in different languages click on the links below:
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 Top FAQs

When is my VAT payment due?
VAT payments are due by the 25th day of the first month commencing after the end of the tax period, for businesses who file their returns and make payments electronically.

Can I continue with trading while waiting for my VAT registration number?
Yes.

How is VAT calculated?
Deduct input tax from output tax laibility which will result in VAT payable or refund.