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Follow these two steps to determine whether you need to charge Vat or not

by , 19 November 2014
Are you registered as a Vat vendor with a valid vat number? Start charging your clients Vat and claim input tax back from SARS.

But before you do anything, you need to work out which supplies you can charge Vat on.

If you get this wrong, SARS will very quickly slap you with harsh penalties.

That's why we're revealing the two simple steps you must take to determine whether or not you can charge Vat.

 

Don't know when to charge Vat? Use these two steps to get it right

 
There're only two steps to follow to establish whether to charge Vat or not. These steps are:
 
Step #1: Always look at your Vat status as a seller or supplier. If you registered for Vat, your sale or service is a taxable supply and you must levy Vat on the transaction. 
 
You must then determine whether to charge Vat at the 14% standard rate or at the zero-rate. (Zero-rated supplies are goods the supplier charges with Vat at the rate of zero percent)
 
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You can get all your business tax questions answered by our experts for FREE thanks to the Vat Helpdesk…

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Step #2: Ask yourself if your supply is an exempt supply. Exempt supplies have no Vat charged on them, compared to standard and zero-rated supplies, which have Vat levied at a rate of 14% and 0% respectively. 
 
Expert supplies are ones that Section 12 of the Vat Act exempt from tax. You can find a list of 11 exempt supplies in the Practical Vat Loose Leaf Service
 
If you determine you have taxable supplies that don't fall under Section 12 then you can charge Vat, just ensure you charge the supply at the correct rate.
 
Doing this will help you ensure you always charge Vat correctly.
 

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