Value-Added Tax

What is new?

  • 9 December 2022 – The December issue of the VAT Connect newsletter is available.
  • 1 July 2022 – VAT Domestic Reverse Charge (DRC) on valuable metal from 1 July 2022
    A VAT Domestic Reverse Charge (DRC) on valuable metal was introduced in the Regulation published in Government Gazette 46512 on 8 June 2022, see Regulations on Domestic Reverse Charge relating to valuable metal, issued in terms of section 74(2) of the Value-Added Tax Act, 1991 (Act 89 of 1991), Notice 2140.  The DRC Regulations came into effect on 1 July 2022. For a comprehensive understanding of these Regulations, see the Explanatory Memorandum and Media Statement. For more information see the VAT Domestic Reverse Charge webpage.

What is VAT?

VAT is an abbreviation for the term Value-Added Tax.  It is an indirect tax on the consumption of goods and services in the economy. Revenue is raised for government by requiring certain traders (vendors), that carry on an enterprise to register for VAT.

Subject to certain conditions, the vendor must then charge VAT on supplies of goods and services made by it (output tax). VAT is only charged on taxable supplies made. Taxable supplies are supplies for which VAT is charged at either the standard rate (currently 15%) or zero rate (0%). There is a limited range of goods and services which are subject to VAT at the zero rate or exempt from VAT.

The vendor will also be entitled to deduct VAT charged to it (input tax) when incurred for making taxable supplies. Under limited circumstances a vendor may claim a deduction (notional input tax) on a supply made to it by a business that is not registered for VAT.

VAT is non-cumulative, meaning that a credit/deduction is allowed for VAT paid in previous stages, within the production and distribution chain. The vendor is required to pay the difference between the output tax and the input tax or claim a VAT refund where the input tax exceeds the output tax.

VAT is therefore, charged at each stage of the production and distribution process and it is proportional to the price charged for the goods and services. VAT is also payable on the importation of goods and on imported services.

Related Documents

GEN-ELEC-04-G01 – Guide for completing the Value Added Tax VAT201 Declaration – External Guide

GEN-ENR-01-G01 – Guide for the submission of third party data using the connect direct channel – External Guide

GEN-ENR-01-G02 – Guide for Submission of Third Party Data Using the HTTPS Channel – External Guide

GEN-REG-01-G04 – How to Complete the Registration Amendments and Verification Form RAV01 – External Guide

LAPD-Gen-G01 – Taxation in South Africa

LAPD-Gen-G02 – Guide for Tax Rates Duties Levies

LAPD-Gen-G08 – Guide on the Taxation of Professional Sports Clubs and Players

LAPD-IT-G19 – Comprehensive Guide to Dividends Tax

LAPD-IT-G21 – Guide on the Taxation of Foreigners working in South Africa

LAPD-IT-G24 – Guide on Mutual Agreement Procedures

LAPD-TAdm-G01 – Short Guide to the Tax Administration Act 2011

LAPD-VAT-G01 – VAT 403 Vendors and Employers Trade Classification Guide

LAPD-VAT-G02 – VAT 404 Guide for Vendors

LAPD-VAT-G03 – VAT 409 Guide for Fixed Property and Construction

LAPD-VAT-G04 – VAT 411 Guide for Entertainment Accommodation and Catering

LAPD-VAT-G05 – VAT 412 Guide for Share Block Schemes

LAPD-VAT-G06 – VAT 413 Guide for Estates

LAPD-VAT-G07 – VAT 414 Guide for Associations not for Gain and Welfare Organisations

LAPD-VAT-G08 – VAT 419 Guide for Municipalities

LAPD-VAT-G09 – VAT 420 Guide for Motor Dealers

LAPD-VAT-G10 – VAT 421 Guide for Short Term Insurance

LAPD-VAT-G11 – VAT Rulings Process Reference Guide

LAPD-VAT-G13 – Pocket Guide on the VAT rate increase on 1 April 2018

LAPD-VAT-G14 – VAT FAQs Increase in the VAT Rate from 1 April 2018

LAPD-VAT-G16 – VAT FAQs Supplies of electronic services

LAPD-VAT-G17 – VAT Reference Guide for Foreign Donor Funded Projects

Legal-Pub-FAQs-VAT12 – FAQs on BGRs 40 and 41 Non-executive Directors (VAT and PAYE)

Legal-Pub-Guide-Gen01 – Taxation in South Africa

Legal-Pub-Guide-VAT15 – VAT Quick Reference Guide for Non-Executive Directors

SPPOA – Special Power of Attorney – External Form

TPPOA – Special Power of Attorney to Tax Practitioner – External Form

VAT 411 – Guide for Entertainment Accommodation and Catering – External Guide

VAT-ELEC-01-G01 – Manage Value Added Tax on Imported Services – External Guide

VAT-REG-02-G01 – Guide for Completion of VAT Application – External Guide

VAT-REG-02-G02 – Foreign Suppliers of Electronic Services – External Guide

VAT101 – Value Added Tax Registration Application – External form

VAT101D – Application for Registration of Diesel Refund – External Form

VAT102 – Application for separate registration VAT – External form

VAT102D – Application for Registration of Diesel Refund – External Form

VAT102DIP – Application for Separate Registration of Offices of International Organisations – External Form

VAT117 – Application for Change in Accounting Basis – External Form

VAT119i – Indemnity iro VAT Act Bank Details – External Form

VAT121 – Application for Category E – External Form

VAT123D – Application for the Cancellation of Diesel Registration of a Person – External Form

VAT123T – Application for Cancellation of a Separately Registered Enterprise – External Form

VAT125 – Declaration by Representative Vendor – External Form

VAT128 – Confirmation of Partnership – External Form

VAT201 – Vendor Declaration – Sticky Notes

VAT202e – Notice of Change of Tax Period iro the Submission of a Return VAT 201 – External Form

VAT215 – Record in respect of Imported Services – External Form

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