How does VAT work?

The South African Revenue Services (SARS) has put together a VAT guide for vendors which explains all VAT requirements in detail.

Registration for VAT is voluntary except when your turnover for any consecutive 12 month period will- or is likely to – exceed R1 million.

The impact on you :

If you / your business decides to register for VAT, you have to take the following factors into account :

• You will have to charge 14% VAT on all your sales
• You can claim 14% VAT on all goods purchased / or services rendered by businesses who are registered for VAT – you have to be in possession of a valid VAT invoice from your supplier / service provider.
• You have to submit a VAT 201 form to SARS every 2 months to either pay the VAT due to them, or to claim back an amount owing to you.

The rules for VAT are quite complicated and due to penalties and possible criminal charges that can be laid against you, our advice is that you contact us before hand for guidance.

We can assist you in registering for VAT with SARS.

SOURCES :
Cronje & Cronje
Business Partners