Page 31 - GA Maclachlan Tax Guide 2024

VALUE-ADDED TAX (VAT)

The VAT system comprises of three types of supplies:
■ Standard-rated supplies – supplies of goods and services subject to the VAT
rate in force at the time of supply� With effect 1 April 2018 the VAT rate was
increased from 14% to 15%
■ Exempt supplies – supplies of certain services not subject to VAT� Vendors
making exempt supplies are not entitled to input VAT credits
■ Zero-rated supplies – supplies of certain goods or services subject to VAT at zero
percent� Vendors making zero-rated supplies are entitled to input VAT credits

Key features
■ Enterprises with a turnover of less than R1 000 000 in any period of
12 months are not obliged to register for VAT
■ Enterprises with a turnover of less than R50 000 in any period of 12 months
are not permitted to register for VAT
■ VAT returns are generally submitted on a two monthly basis unless turnover
in any period of 12 months exceeds R30 million, in which case returns are
submitted monthly
■ Farmers may submit VAT returns on a six monthly basis as long as their
turnover does not exceed R1�5 million and property letting companies and
trusts may, subject to certain requirements, submit annual VAT returns
■ Vendors may reclaim the VAT element on expenditure incurred for the purpose
of making taxable VAT supplies except on, entertainment, excluding qualifying
subsistence, passenger vehicles (including hiring) and club subscriptions
■ Input tax credits may not be claimed on expenditure relating to exempt
supplies
■ Input tax credits may only be claimed upon receipt of a valid tax invoice
■ In order to be a valid tax invoice the name, address and VAT registration
number of the recipient and supplier must appear on tax invoices where the
VAT inclusive total exceeds R5 000
■ A deposit is not subject to output VAT until the supplier applies the deposit
as consideration for payment

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