Our friends at the Rogue Unit phoned and they want their VAT back. Well, it was them and their friends at the Saxonwold Shebeen but, in certain circumstances, we are duty bound to go through the process of VAT Registration to help you account to SARS for the Value Added Tax you have been charging and paying on taxable supplies.
What is VAT?:
Besides (allegedly) funding Rosatom (The Russian State Nuclear Corporation) and the nuclear build, Value Added Tax is an indirect tax on the consumption of goods and services in the economy. It seeks to generate revenue for the fiscus by requiring certain businesses to register for and to charge VAT on the taxable supplies of goods and certain services.
Certain goods and services are “zero rated” for VAT and thus do not attract VAT, but you may struggle to find these, since it seems this list of goods and services is growing ever smaller.
When do you need to register for VAT and when is it voluntary?:
- Any business which carries on a trade must go through the process of VAT Registration if the total value of taxable supplies made in any rolling 12 month period exceeded or is expected to exceed R1 million; OR
- Alternatively, you may voluntarily complete the VAT Registration process if your value of taxable supplies has exceeded R50 000.00 (fifty thousand Rand) in the last 12 month period.
What happens once you have gone through the VAT Registration Process?:
Once you have completed the process of VAT Registration, you will be referred to as a VAT Vendor and be required to charge VAT at the standard rate of 14% on the supply of most goods and services and on the importation of goods. VAT Registration means that you may be required to charge(or be charged) at each stage of the production and distribution process and it is proportional to the price charged for the goods and services.