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If you want to avoid Vat penalties, use these three tips

by , 25 August 2014
There's a high price to pay if you fail to comply with the Vat Act.

Don't believe us?

Well, if you don't comply with the Vat Act, there are four penalties you could face. They are:

1. Fixed-amount administrative/non-compliance penalties;
2. Percentage based penalty;
3. Understatement penalty; and
4. Criminal penalties.

So not only could you find yourself bankrupt with all the money you'll have to fork out, but you could also find yourself in jail just for failing to comply with the Vat Act.

We know you're not prepared to take that risk. That's why today, we're revealing three tips that'll help you avoid these Vat penalties all together.


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Three tips to help you avoid Vat penalties
 

Tip #1: Keep to the registration requirements

This means, you must:
 

  • Register for Vat when required to, for example, if your turnover is more than R1million in12 months, you must register.

  • Complete the registration form correctly and in full i.e. don't give false information to SARS.

  • Submit support documents that SARS requires i.e. bank statements.

 
Tip #2: Change your details with SARS

Inform SARS when you change your bank details and postal, physical or electronic address so SARS can contact you when it needs to, for example, in case of a Vat refund audit.

In addition, tell SARS when you change your representative taxpayer so it knows who to hold responsible.

Tip #3: Submit your Vat returns

Submit your Vat returns when due and sign them so that you show SARS you aren't trying to evade tax.

Well there you have it. Using these three tips will help ensure you avoid Vat penalties. If you want more tips, be sure to check out the Practical Vat Loose Leaf Service.
 



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