In 2012, we wrote a blog post on VAT, providing some basic information such as who should register, when to register and how to register for Value Added Tax. Due to the amazing response we have had from this article, we thought we would build on it and provide a little more information around VAT.
In this article, we will answer some questions about VAT vendors, when to submit VAT returns and list some important points for VAT vendors to keep in mind.
As you know, Value Added Tax (VAT) is an indirect tax levied on the consumption of goods and or services. VAT is charged at each stage of production and distribution and the government collects this revenue through its VAT vendors.
What is a VAT vendor?
A VAT vendor can be an individual, company, trust fund, partnership, etc who is obliged to register for VAT.
Remember that you are required to register as a VAT vendor if your taxable supplies made or the taxable supplies that will be made, are in excess of R1 million in any consecutive twelve-month period.
When to submit VAT returns?
As a VAT vendor, you need to make VAT returns and related payments of your VAT liability according to the tax period that was allocated to you. The same applies for claiming VAT refunds.
For most businesses, these returns, payments or claims must be made before or on the 25th day after the end of the tax period.
Be sure to submit your returns on time, as late submissions will incur penalties.
SARS VAT Guide
If you are a VAT vendor or thinking of becoming one, SARS has a very useful VAT Guide that should answer any more detailed questions you may have:
This SARS VAT guide highlights a number of important points for VAT vendors including:
- Vat vendors need to ensure that all of their marked prices, whether on quotations or in marketing material include VAT (currently 14%).
- To claim VAT, be sure to receive a tax invoice when making purchases. This should clearly display your VAT number on it.
- Keep your tax invoices in a safe place for at least 5 years.
- As a VAT vendor, you are collecting tax on behalf of the state, therefore penalties are put in place if the VAT you have charged is not paid over on time.
- If goods are being sent to an export country, you can charge VAT at 0%. However if delivery is in South Africa, VAT must be charged at the applicable rate.
If you are interested in finding out about the benefits of registering for VAT or you need assistance in registering and managing your VAT returns, call Brett on 021 421 4444.