VAT

VAT or Value-added tax is an indirect tax that are gathered by vendors on behalf of government. The tax normally applies to the delivery of goods or services and are charged at each stage of the production process of the goods or services.

In South Africa, VAT is presently levied at the rate of 14%. During the Minister's budget speech in February it was proposed that the existing VAT registration threshold be increased from R300,000 to R1,000,000. Any person who has taxable supplies in excess of R300,000 per annum are liable for compulsory registration, although voluntary registration is possible if a person exceeded the minimum threshold of R20,000 for the 12 month period.

You are required to submit returns and account for VAT to SARS according to the tax period allocated to you. Tax periods cover one, two, four, six or 12 calendar months. On acceptance of your registration by SARS, you will be allocated one of these categories. Tax periods end on the last day of a calendar month.

A comprehensive description on VAT is available from the SARS web site HERE

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