Page 55 - Nexia SAB&T Property & Tax Guide 2022

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. A vendor making taxable supplies of more than R50 000,
but not more than R1 million per annum, may apply for voluntary registration.
◆ 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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