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VAT in SA is charged at each stage of the production and distribution process and it is proportional to the price charged for the goods and services.
VAT is currently set at the standard rate of 14% on the supply of most goods and services and on the importation of goods. The VAT on the importation of goods is collected by customs. There is a limited range of goods and services that are subject to VAT at the zero rates or are exempt from VAT.
Any person that carries on a business may register for VAT. You can register once for all different tax types using the client information system. The term person is not only limited to companies but also includes, individuals, partnerships, trust funds, foreign donor funded projects and municipalities. You can register through the SARS website.
It is mandatory for a person to register for VAT if the taxable supplies made or to be made is, in excess of R1 million in any consecutive twelve-month period.
A person may also choose to register voluntarily if the taxable supplies made, in the past period of twelve months, exceeded R50 000. As from the 1st of March 2012, qualifying micro businesses that are registered for turnover tax may also choose to register for VAT provided that all the conditions for voluntarily registration for VAT are met.
A person who is obliged to register for VAT is referred to as a vendor.
A vendor is required to submit VAT returns and make payments of the VAT liabilities (or claim a VAT refund) in accordance with the tax period allocated to the vendor. The VAT returns and payments are normally submitted and or made on or before the 25th day after the end of the tax period. Late payments of VAT will attract a penalty and interest.
| Payment method | Return due date | Payment due date |
| Payments at ABSA, Albaraka Bank Limited, Bank of Athens, FNB, HBZ Bank LTD, Nedbank and Standard Bank. | 25th | 25th |
| Electronic Fund Transfers (including internet banking) | 25th | 25th |
| eFiling of return and payment via either SARS eFiling or Electronic Funds Transfers (internet banking) | Last business day | Last business day |
Once the business is registered for VAT, the vendor or representative vendor is obliged to perform certain duties and take on certain responsibilities, for example, the vendor or representative vendor is required to:
For businesses that file their VAT returns and make payments electronically the VAT must be paid by no later than the last business day of the month after the end of the tax period.
For all other businesses, the VAT must be paid by no later than the 25th day after the end of the tax period
A VAT refund is an amount of VAT that is payable by SARS to a vendor, where
A vendor is required to calculate their VAT liability, in relation to its allocated tax period, by off-setting input tax, VAT that is charged on the acquisition of goods and services and which is allowed as a deduction, against output tax, VAT that is charged on the supply of goods and services by the vendor. The difference is either paid to SARS or a refund is claimed from SARS, in the case of input tax exceeding output tax.
If a vendor is entitled to a refund, SARS is required to pay that refund within 21 business days of receiving the correctly completed VAT return in respect of that refund.
In the case of a high-risk refund claim SARS will use a risk engine to objectively identify any risks that may be associated with the refund, which warrants further investigation and auditing. Vendors that are registered for e-Filing can use the Refund Dashboard to see the status of their refunds.
Vendors that are selected for further verification of their refund claims will be requested to submit supporting documents. Failure to do so will inhibit the process.