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Are you a foreign company that supplies goods or services in South Africa? Meet these Vat registration requirements or face two years in jail

by , 20 February 2015
The Vat Act doesn't only apply to South African companies when it comes to Vat registration.

It applies to non-resident companies (foreign businesses) too. And it's important you know what you must do to comply.

If you don't, SARS penalties aren't the only thing you could face. You could also face a two year jail term.

Since that's a risk you can't afford to take. Keep reading to discover the two requirements you have to meet when it comes to Vat registration so you can comply.

Two years in jail isn't worth it. Fulfill your Vat registration requirements as a foreign company

1. The first requirement is that if you're a non-resident company and supply goods or services in South Africa, you must register for Vat if your supplies exceed R1 million in any 12-month period. Or if you expect it to exceed R1 million in the next 12 months.
Bear in mind that in terms of Vat law, 'your foreign company doesn't need to have a permanent establishment. Or physical presence in South Africa to be liable for Vat registration.' It just needs to carry out an enterprise. And, if turnover from this South African enterprise is more than R1 million, it's compulsory to register for Vat.
2. The other requirements are that, to apply for Vat registration, you must:
  • Appoint a Vat representative in South Africa.
Keep in mind that while SARS wants you to hire a Vat representative, it will insist on seeing you as the foreign owner, director or CEO of the company when you submit your Vat101 application.
  • Open a bank account; and
  • Give SARS details about your Vat representative and your bank account.
Now that you know the Vat registration requirements you must meet as a non-resident company, take a look at your duties once you register…

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Are you willing to wait more than 6 months for Vat registration?

SARS has confirmed that the minute you've applied for Vat registration, you must start charging Vat. Otherwise, and the amount you've charged your customers will be regarded as being inclusive of Vat. And the Vat will come out of your pocket...

You can rely on our experts and take advantage of their experience with SARS! Learn how to stand up for your rights! The A-Z of Vat Registrations ereport will give you that.


Once you register for Vat as a foreign business, adhere to these duties

The Practical Vat Loose Leaf Service says you must:
  • Submit Vat returns and payments on time;
  • Give SARS accurate information;
  • Include Vat in prices, advertisements and quotes;
  • Keep accurate accounting records for five years;
  • Give SARS the correct documents when it asks you to;
  • Issue tax invoices, debit and credit notes;
  • Tell SARS about changes in your company (e.g. changes about your trading name, shareholders, bank details etc); and
  • Notify SARS of changes in the details of your Vat representative.
Remember, any person who's liable to register for Vat but fails to do so is guilty of an offence. If convicted, you will be liable to a fine or two years in jail. Plus, SARS will also ask you to pay the Vat you owe it. So now that you know your Vat registration requirements as a foreign company are, fulfill them.
PS: For more information on Vat registration check out The A-Z of Vat Registrations.

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