VAT

Value added tax, or VAT, is a tax levied on most goods and services provided in South Africa. VAT is paid on the supply of goods or services, or the importation of goods and services.

The current standard rate of VAT is 14%.

Any person making taxable supplies in excess of R1 000 000.00 in any 12 month consecutive period must register as a VAT vendor. Any person may choose to register voluntarily provided that the minimum threshold of R50 000.00 annual turnover (increase in threshold effective from 1st March 2010) has been exceeded over the past 12 months.

Voluntary VAT registration

Any supplier making taxable supplies in excess of R50 000 per annum, provable over the past 12 months, may apply for a Voluntary VAT Registration

Compulsory VAT registration

Any supplier will be liable to register for VAT if the income earned from selling goods or fees earned from services supplied is more than R1 million in any consecutive period of 12 months, or is reasonably expected to exceed that amount.

The value of taxable supplies (turnover) is calculated on an ongoing basis. When closing off your books for the month, you need to keep a running total of your turnover for the past 12 months. If this total has exceeded R1 million in any particular month, you must register from the first day of the next month. You also need to consider the next 12 months, because if it is likely that you will exceed the limit, you must register immediately or at least within 21 days of becoming aware that you will be liable to register.

Additional information

More information can be found in the SARS VAT Vendor Guide, VAT–404.