You know you have to register as a Vat vendor if your turnover is more than R1 million for the year. And because of the benefits of registering for Vat, you might want to register before you get there.
But you can't just rock up at SARS and expect it to accept your voluntary Vat registration.
It will only do that if one of these four circumstances applies to your company...
There are four circumstances when SARS will accept your voluntary Vat registration
Registering as a Vat vendor has advantages like claiming back input tax. This is why a lot of vendors want to register their business even when they don't have to.
You can do this even if your taxable turnover isn't at the R1 million yet. But SARS will only accept your voluntarily Vat registration if one of these situations applies:
Your company is a welfare organisation, local authority or share block company. Your taxable turnover is greater than R50 000 (R50 000 from 1 March 2010). R50 000 is the minimum turnover you must have before you can voluntarily register;
You started running your business and it incurred taxable turnover of more than R50 000 in the previous year;
You carry on an enterprise as a welfare organisation, share block company or municipality. If you do, you can opt for voluntary registration even if you made less than R50 000 (from 1 March 2010) in the previous year; or
If your business means you'll make taxable supplies only after some time. During this time, you expect to make taxable supplies that exceed R50 000 (from 1 March 2010). This must happen over a 12 month period for you to register as a Vat vendor.
For example, a new gold mine has start up expenses, but will only start production in a few year's time. This type of enterprise can register for Vat if SARS approves.
Remember, if none of these circumstances applies to you and your taxable turnover isn't more than R1 million a year, SARS will refuse your registration.
Here are four other situations when it will reject your application.
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You need to follow the right procedure when you submit your VAT101 form. If you don't, you might have to pay out of your own pocket Vat owed to SARS while you wait for your Vat number.
Luckily for you, we've put together an eleven-step action plan to help get your Vat number the same day... And I want you to have it!
Four situations when SARS won't approve your voluntary registration
If you have no fixed business or residential address;
If you don't keep proper accounting records for all of your businesses transactions;
If you don't have a bank account for your business with a bank, mutual bank or other similar institution; or
If you were a registered vendor before for any enterprise, either under the Vat Act or the Sales Tax Act, and didn't perform your duties in terms of either of these Acts.
If any of these situations apply to your business, don't even try to register for Vat. But if they don't and you fall into one of the first four situations, you can apply and start reaping the benefits of Vat registration today.
For more about Vat registration, check out The A-Z of Vat Registrations E-report.