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Claim Vat refunds correctly or prepare to face these penalties...

by , 14 August 2014
When your input tax exceeds your output tax, you're due a refund! This means you must submit your Vat return to SARS so it can pay you back.

What usually happens is most vendors tend to go overboard when it comes to Vat refunds. They just want to get every little penny from SARS. As a result they up claiming refunds incorrectly.

And that's when SARS pounces to slap you with the following penalties for trying to squeeze more money from its purse...


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These are the penalties you could face for claiming refunds incorrectly

SARS can hit you with penalties that include a fine or even imprisonment for up to two years if you claim Vat incorrectly or five years for evasion! SARS can also levy interest at the prescribed rate.

So never:

  • Claim non-existent amounts of input tax;
  • Claim input tax that you can't verify; or
  • Make a claim that you don't have complete documentation for. (If you can't prove it, or if your records are incomplete or invalid, don't even attempt the claim.)

SARS sees this as fraud and it'll penalise you. So instead of getting the refund you wanted so badly, you'll have penalties coming your way.

To be on the safe side, check out this article. It contains four rules you must follow when it comes to Vat refunds.

We also recommend you check out the Practical Vat Loose Leaf Service. It'll show you the two steps to take to claim your Vat refund, give you tips that'll help you get your Vat refund quicker and so much more.

Now that you know the penalties you'll face for claiming Vat refunds incorrectly, make sure you comply. As you can see, it's just not worth it.

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