- Value-added Tax (VAT)
Did you know that governments worldwide have shifted taxation to VAT and other indirect taxes over recent years to stabilise their tax base.
VAT and other indirect taxes are transaction driven, complex, and can have a major impact on your profit.
Who should register for VAT?
A person can only register for VAT if they are carrying on an enterprise. A “person” is defined in the VAT Act and includes, but is not limited to, an individual, company, partnership, trust fund and a municipality.
“Enterprise” is a defined term in the VAT Act. It includes any activity carried on continuously or regularly by any person in or partly in South Africa where goods or services are supplied to another person for a consideration, whether or not for profit. Anything done to start or terminate an enterprise is also included as conducting an enterprise for VAT purposes.
It is compulsory for a person to register for VAT if the value of taxable supplies made or to be made, is in excess of R1million in any consecutive 12-month period.
An application for a compulsory VAT registration must be made within 21 business days from the date the R1 million is or will be exceeded.
Non-resident suppliers of certain electronic services are also liable for compulsory VAT registration at the end of the month in which the total value of taxable supplies exceeds R1 million. An intermediary is also allowed to register and account for VAT on behalf of supplies made by the non-resident supplier of electronic services.
A person may also choose to register voluntarily for VAT if the value of taxable supplies made or to be made is less than R1 million but has, under certain circumstances, exceeded R50 000 in the past period of 12 months.
At APS, we help small and medium size businesses owners as well as start-ups with VAT across the whole business lifecycle, from when your company is formed through to detailed structuring of transactions and assistance in terms of interactions with SARS, such as objections and audits.
Please contact us so that we can help you register for VAT and avoid non-compliance penalties from SARS.