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Vat basics 101: Our experts answer your three burning Vat questions

by , 30 April 2014
If you've recently registered as a Vat vendor and are struggling with some of the Vat basics, like when to pay Vat, don't fret. Even seasoned Vat professionals sometimes get lost in the Vat maze. The good news is our Vat experts are going to answer three of the basic questions regarding Vat. Use the answers to get it right all the time and avoid SARS penalties.


Errors in Vat invoices could cost you thousands!

Are there any inaccuracies in your Vat invoices? You may be charged a very high penalty!

Click here to find out how to make sure your Vat invoices are 100% legal.


Don't struggle with the basics. These three Vat answers will shed some light

Question #1: When do I need to pay Vat?

Answer: This is determined by your tax period.

Depending on the size and turnover of your business, you'll have to pay over your output tax to SARS at specific and regular intervals.

For example, if you're a Category C vendor and your turnover exceeds R30 million a year, you have to pay your Vat monthly.

If you belong to either Category A or B (your turnover is less than R30 million a year), you must pay your Vat every two months.

And if you're a Category F vendor and your turnover is less than R1.5 million a year, you must pay your Vat every four months.

If you want more info on tax periods and how you qualify for each vendor category, be sure to check out the Practical Vat Loose Leaf Service.

Question #2: How should I calculate my company's Vat liability?

Answer: To calculate your Vat liability, subtract the input tax claimed from the output tax charged.

If your output tax exceeds your input tax, you have to pay this difference to SARS. If your input tax exceeds your output tax, claim a refund from SARS.

That's not all regarding Vat basics. Keep reading to discover the answer to smooth Vat operations.


Think Vat doesn't apply to your payroll?

You're wrong!

Avoid this common error and keep SARS away from your door at audit time.


Question#3: What's the key to smooth Vat operations?

Answer: Invoices.

It's crucial that you get your invoicing right. This will help you back up your input tax claims and you'll stay legal.

Warning! If you get your invoices wrong, SARS will still expect you to pay the output tax, even if you haven't charged or recovered it from your customers! So make sure you get your invoicing right first time, every time.

We've just scratched the surface with these basic Vat questions. If you want more answers regarding Vat, the Practical Vat Loose Leaf Service has got you covered. Be sure to check it out so you won't get lost in the Vat maze. And ask your questions here if you have any.

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