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Thread: VATable supply bought from a Non-Vendor(not registered for VAT)

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    VATable supply bought from a Non-Vendor(not registered for VAT)

    Good evening,

    I am a bit lost and would appreciate your help/advice. We are VAT registered but have some suppliers who are not VAT registered and hence do not charge VAT.

    If we purchase a vatable supply (standard rated - @14%) from a non-vendor, who on the tax invoice correctly did not charge or indicate VAT. How am I to account for it in our books, having the following options only:

    Zero-rated (Does not qualify)
    Standard rated (Qualify but supplier not VAT registered and did not charge vat on invoice)
    Exempt (Does not qualify)

    Upon selling this item we would customarily charge our clients VAT for this supply.


    I hope my cry is clear!

    Regards,
    Nakwila

  2. #2
    Platinum Member Mike C's Avatar
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    Hi Nakwila - what accounting package are you using?
    An education isn't how much you have committed to memory, or even how much you know. It's being able to differentiate between what you do know and what you don't. - Anatole France

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    Junior Member padjakkels's Avatar
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    See that you from Namibia, so I am not certain if your VAT work the same as SA.

    I would put the payment for the purchase through as a Zero rate, as you can not claim the VAT back.

    And I would also like to know what accounting package you use.

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    Hi Team,

    We are using Sage Pastel. So I should rather use zero-rated? Guidelines are basically the same, with very small variances however our standard rate is set at 15% rather than your 14%.

    Regards,
    Nakwila

  5. #5
    Platinum Member Mike C's Avatar
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    Hi Nakwila - these are the settings that we use on our Pastel.

    00 - No VAT
    01 - Normal VAT
    02 - Zero Rated (not including capital goods)
    03 - Tax Exempt
    04 - Bad Debts
    05 - Capital Goods
    06 - VAT Adjustment
    07 - Accommodation exceeding 28 days
    08 - Accommodation not exceeding 28 days.


    There is a difference between Zero-rated Supplies and Exempt Supplies.

    Certain basic foodstuffs are zero-rated, provided it is not supplied for immediate consumption (that is, as a meal or refreshment) or added to a standard-rated supply.
    Certain specified “fuel levy goods” - these include crude oil and certain petrol and diesel based products.
    The sale of a business or part of a business which is capable of separate operation as a going concern qualifies for the zero rate if all of the requirement set down are met.
    Certain farming goods ... etc

    Exempt supplies are supplies of goods or services where VAT is not chargeable at either the standard rate or the zero rate and will not form part of taxable turnover.
    Some examples of exempt supplies include –
    • financial services (such as, interest earned for the provision of credit, life insurance, the services of benefit funds such as medical schemes, provident, pension and retirement annuity funds);
    • donated goods or services sold by non-profit bodies (such as, religious and welfare organisations);
    • residential accommodation in a dwelling (but not holiday accommodation);
    • passenger transport in South Africa by taxi, bus, or train;
    • educational services provided by recognised educational institutions
    • childcare services provided at crèches and after-school care centres.


    So in your situation I would suggest using 00 for those suppliers who are not registered for VAT.
    An education isn't how much you have committed to memory, or even how much you know. It's being able to differentiate between what you do know and what you don't. - Anatole France

  6. Thank given for this post:

    Dave A (12-Oct-16), padjakkels (05-Oct-16)

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    Mike, Thank you so so much for the solution! It answered my question with extra valuable info!

    Thanks...

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