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Turnover over R50,000 a year? It's a good idea to voluntarily register for Vat...

by , 16 April 2013
Brick factories in Nepal are flouting Vat rules due to their political links. For example, many haven't registered to pay value added tax (Vat) despite a government order making it compulsory for them to do so. In South Africa, it's compulsory to register your business with SARS for Vat purposes if you make taxable supplies in excess of R1 million in any 12-month consecutive period. But did you know you can voluntarily register for Vat, too? It's a great way to get some cash back from SARS!

 
Intimidation is rife in Nepal, with physical violence brought against a brick manufacturer who dared to register his factory with the local Vat office, says eKantipur.
 
 Now, Nepal's revenue and tax offices are taking action against firms that haven't registered for Vat and those not issuing proper invoices reflecting how Vat was charged.
 
This would land you in hot water locally, too.
 
Especially as SARS is now upping the amount of Vat audits it conducts, to check compliance of businesses, says FSP Business.
 
But did you know that you can voluntarily register for Vat?
 
It's a great way to prove your willingness to comply with SARS and the Vat Act.
 
You can choose to voluntarily register for Vat if you've made taxable supplies in excess of the minimum threshold of R50,000 in the past 12-month period, says SARS.
 
You can even voluntarily register for Vat if the taxable supplies will only be made after some time, but you reasonably expect the taxable turnover to exceed this minimum threshold. 
 
In this case, SARS can cancel your Vat registration if the value of your taxable supplies at the end of the 12-months falls below the threshold, says FSP Business.
 
Here's when it's a good idea to voluntarily register for Vat
 
It will benefit you to register if your input tax is likely to exceed your output tax – for example, if you export goods, says The Practical Vat Loose Leaf Service.
 
'The advantage to being Vat registered, is that most Vat charged by and paid to other Vat vendors (Input tax) can be offset from the Vat that one charges (Output tax). This claimed back Vat would otherwise be lost into the void that is SARS' coffers,' explains MyBroadband.
 
You've got nothing to lose!
 


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