HomeHome SearchSearch MenuMenu Our productsOur products

Comply with this one Vat registration rule if your business has separate branches or face a 200% penalty

by , 05 February 2015
You have to register your business for Vat if your turnover is above R1 million for the year. If you don't, you'll face 200% penalties from SARS.

But it's not always a simple case of just registering your company.

If you have multiple branches, you have to follow a specific Vat registration rule.

Read on to find out what it is so you can comply...

If you have separate branches on your business, comply with this Vat registration rule

In this case, you can register the separate branches of your business separately for Vat. This means each branch must have its own Vat number. But you can only do this if:
1.       The separate enterprises, sections or branches of your business follow the same tax period as the main registration. The only exception for this is farming. Farms can apply to be in Category D even though the others are in category A or B;
2.       Each branch uses the same accounting basis (invoice or payment basis). But each branch must keep separate accounting records. These must detail all their transactions separately including their input and output tax; and
3.       Each branch must be completely separate and independent from the others in terms of its activities and location. This excludes international branches.
When you register each branch separately under these provisions it will get its own Vat registration number and will account for Vat separately.
But bear in mind, if you applied for all the separate registrations for each branch, SARS will still hold you responsible. If any branch doesn't perform the duties the Vat Act requires them to, you have to answer to SARS.
And remember you can't get away with not registering one of the branches.
*********** Reader's choice  ***************
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...
It's illegal to not register your company's branches for Vat
It's an offence to not register any of your company's branches for Vat. You have to follow the same rules and register each branch when its turnover is more than R1 million for the year.
If you don't and SARS finds out, it will change you a 200% penalty and it could even send you to jail for longer than two years.
On top of that, SARS will expect you to pay it all the Vat you didn't charge on your supplies. This could cost your company everything.
So, if you have separate branches monitor each one's turnover very closely. See when they're near that R1 million mark and start the Vat registration process.
To make sure you do this correctly and get all your registrations done on time, get your hands on the Practical Vat Loose Leaf Service and The A-Z of Vat Registrations E-report. They contain everything you need to know about getting your Vat registration right the first time.

Related articles

Related articles

Related Products

Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance

Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today

Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism

This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands

Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>