Frequently asked questions

How long does it take to register for VAT?

VAT registration may take between 5 - 21 working days, depending on whether SARS requests verification of your company details and/or premises.

What type of expenses can you claim for VAT?

VAT paid by a vendor to a VAT registered supplier on any goods or services which were acquired for use in its business may qualify as an input tax deduction, subject to certain exceptions. It is important that input tax may only be deducted insofar as the goods or services are used for the purposes of making taxable supplies. Subject to certain exceptions, no VAT may be deducted when goods or services are acquired for entertainment related, private, exempt, or other non-taxable purposes. Input tax (notional input tax) may also be claimed in some instances where goods are purchased from non-VAT registered supplier

When can you zero-rate a service?

Subject to the requirements and provisions of the Act, a zero rated supply of a service normally occurs where a vendor supplies services to a person who is not a resident and who is outside the Republic of South Africa ("the RSA") at the time the services are rendered. There are various other zero-rated opportunities for services and vendors must ensure that it complies with all the requirements to avoid being held liable for the VAT.

Why did SARS disallow input tax claims?

There can be numerous reasons for SARS to disallow an input tax claim including but not limited to: failure by the Taxpayer to provide the required source documentation to SARS, claiming input tax deductions related to the making of exempt supplies, certain expenses not allowed such as entertainment, tax invoices/source documents not complying with the provisions of the VAT law.

When to register for VAT?

It is mandatory for any business to register for VAT if the income earned in any consecutive twelve-month period exceeded or is likely to exceed R1 million. However, a business may choose to register voluntarily if the income earned, in the past twelve-month period, exceeded R50 000 or expenses exceeding R50 000 were incurred.

How do I get my VAT back from SARS?

There are various channels for a Taxpayer to follow which is either based on law or provided by SARS as a complaint management process. The Office of the Tax Ombud can also be utilised where SARS do not comply with its administrative obligations. Taxpayers must ensure that the correct process is followed when engaging SARS to avoid further delays.