VAT Law & Submissions
What is VAT?
An abbreviation for “Value-Added Tax”, VAT is an indirect form of tax relating to the consumption of various goods and services within the economy. It allows the government to gain revenue by requiring certain businesses to register to charge VAT on their particular goods and services. These businesses then become vendors that are essentially government agents that collect the VAT.
VAT is currently imposed at a standard rate that equates to 15% of the price of most goods and services, along with the importation of such goods. However, there are a select variety of goods and services that are subject to VAT at a zero rate or are exempt from VAT completely. Regarding the importation of goods, the VAT thereof is collection customs. VAT is also charged at each step of the process regarding production and distribution, and is also proportional to the price that is already charged for the particular product or service.
All thanks to our highly skilled team, we are able to specialise in all tax types, which include VAT! Working with VAT correctly is incredibly important as it can help you avoid VAT audits. All sales that are closed need to be declared, with accurate VAT Inputs being declared correctly.
To ensure that this input is allowed, the following requirements must first be stated clearly on the invoice:
- “Tax Invoice” must be stated clearly
- The unique invoice number must be presented clearly
- Their VAT number must be presented clearly
- Their physical address must be presented clearly
- Your VAT registration number must be presented clearly
- Your physical address must be presented clearly
- The VAT % must be presented clearly
- The total VAT amount must be presented clearly
If you decide to take a chance by claiming your VAT, even if you do not meet all 8 requirements, then you may be audited and receive a penalty as high as 200% if SARS finds it necessary. With Hills Business Solutions, we want to help you keep your hands clean by helping you ensure that you have the right documentation. If you are registered for VAT but do not have all 8 requirements, then we suggest that you reach out to the supplier to have them send you the correct documentation.
In a situation where you have been less than forthcoming to SARS, then we will be able to help you with that too by providing a voluntary disclosure programme that lets you admit any wrongdoings to SARS directly, which will void you of any penalisations whatsoever. However, we cannot provide such a service if SARS has sent you an audit beforehand, as it will no longer be considered “voluntary”.