Businesses that accept bets are treated like any other business. This means if the annual turnover of your betting business exceeds R1 million, you must register as a Vat vendor.
Revealed: Two Vat consequences of betting
Output tax and betting: You see, where a person bets an amount on the outcome of a race or on any other event, for instance the name of the royal baby, the person with whom the bet is placed supplies a service to the person placing the bet. This means your betting business must declare output tax on bets received.
Remember, the Vat Act says that when you supply a service you must levy Vat!
Here's an example of how the Vat consequence works
What is the output and input tax Honest Joe can claim back?
Bets received: R3 420 000 x Vat (14/114) = R420 000
Vat payable to SARS = R56 000
Remember, any amount of bets you place, or the amount of winnings you receive will include a Vat portion.
Knowing the Vat consequences of betting will help ensure your business is compliant.