VAT is an indirect tax levied on nearly all supplies and goods we use on a daily basis.
It is not compulsory for a company or individual to register for VAT unless their turnover exceeds R1 000 000 in any year of assessment. A company or individual may voluntarily register for VAT if they meet the qualifying criteria.
The qualifying criteria for registration are:
- Must be actively trading
- Must have a South African Bank account
- Must have a turnover of at least R50 000.00.
Registration is a quick and effortless process. For more information on VAT registration please visit www.onestopsecretarial.co.za and they will be able to assist you with the registration. If you want to register your business yourself you can get all the information on www.sars.gov.za.
Different tax rates:
VAT is charged at the standard rate of 14% on nearly all supplies and services. There are some exceptions where VAT is charged at 0% or the supply or service is exempt.
The following are examples of zero rated VAT supplies:
- 19 basic food items
- Illuminating paraffin
- Goods subject to a fuel levy
- International transport services
- Farming inputs
- Sale of a going concern and
- Certain government grants
The basic food items are:
- Brown bread
- Maize meal
- Mealie rice
- Dried mealies
- Pilchards / Sardine in tins
- Milk powder
- Dairy powder blend
- Vegetable oil
- Cultured Milk
- Brown wheaten meal
- Edible legumes and pulses of leguminous plants
VAT Exempt supplies
The following are examples of exempt VAT supplies:
- Non-fee related financial services
- Educational services provided by an approved educational institution
- Residential rental accommodation
- Public road and rail transport