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SARS just changed the Vat registration criteria and may be expecting your compulsory registration application now

by , 14 May 2015
If you run an enterprise, you'll reach a point where you'll be liable to register for Vat.

And SARS has just changed the definition of enterprise. You need to know if your business, hobby or other activity qualifies as one.

If you don't register for Vat when you're liable to, penalties and fines from SARS will be the least of your worries. You'll face criminal charges and jail time too!

Read on to find out if you fall under the new definition of an enterprise. SARS may be expecting your Vat registration application.

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Well it doesn't have to be a problem for you.
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The new definition of an enterprise

Your business is an enterprise if you carry on any activity which:
  1. Supplies goods and/or services;
  2. Is on a regular or continuous basis;
  3. Operates inside SA or partly inside SA (this now includes foreign businesses);
  4. Receives a reward in exchange for the supplying of goods and/or services; and
  5. Makes a profit or not.

In addition, SARS has recently added the following businesses/entities under the definition:

  1. Business start-up or winding down activities;
  2. Commercial accommodation (e.g. hotels, B&B's);
  3. Certain government departments which the Minister of Finance has said must register for Vat;
  4. Share block companies;
  5. Businesses supplying telecommunication services to any person, who uses those services in SA;
  6. Electronic services; and
  7. Underwriting insurance business by Underwriting Members of Lloyd's of London in SA.

If your activities meet any of the above 12 requirements, for Vat purposes your business is an enterprise (Section 1 of the Vat Act). Read on to find out if SARS is expecting your Vat registration...

When you're liable register for Vat 

You must register for Vat if you're operating an enterprise and:
  • Your turnover in the last 12 months exceeds R1 million; or
  • You have a contract or an agreement that shows your turnover will exceed R1 million in the next 12 months.

If you haven't done so already, it's compulsory for you to register for Vat. And you can't delay or you'll face backdated penalties from the time you reached your threshold. And, you could also face jail time.

But, if you're operating an enterprise and your turnover is R50 000 in the last 12 months, you can voluntarily register for Vat. In this case, it's not compulsory until you reach the R1 million threshold.

There you have it. Now you know what the new definition of enterprise is, you can register for Vat when you meet the criteria.
P.S. If you want to calculate Vat efficiently and take advantage of little known, legal, Vat saving strategies, simply follow this link...

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SARS just changed the Vat registration criteria and may be expecting your compulsory registration application now
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