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You can't register for Vat if your business isn't an enterprise! Here's how to tell if this applies to you

by , 21 May 2015
Not all businesses in SA can register for Vat.
In fact, if your business isn't classified as an 'enterprise', Vat is out of your reach.
But how do you know if this applies to you?

Today, we take a look.


How to determine if your business is an enterprise so you know if you can register for Vat


Keep in mind that determining if your business is an enterprise will show you if you should register for Vat.

 
Your business is an enterprise if your activity:
 

• Supplies goods and services;

• On a regular or continuous basis;

• Is inside South Africa OR partly inside South Africa;

• Receive something in exchange for you supplying goods or services. This doesn't just refer to money;

and

• If you make a profit or not.

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If your activities meet these five requirements, for Vat purposes your business is an enterprise (section 1, Vat Act).

 

This even includes the activities of a welfare organisation approved by the Commissioner of SARS for welfare activities that fall under the heading:

 
• Welfare and humanitarian;

• Health care;

• Land and housing;

• Education and development; or

• Conservation, environment and animal welfare.
 

Here are some examples of when you can't register for Vat because your business isn't an enterprise

 If the supplies you make are exempt, your business isn't an enterprise.

 
Example 1: Intertour supplies road transport to fee paying passengers in South Africa. This is an exempt service (section 12(g), Vat Act). So Intertour isn't an enterprise.


 
Example 2: John supplies accommodation totalling less than R60 000 per twelve months. So his business isn't an enterprise because R60 000 is the threshold for commercial accommodation (section 1, Vat Act).

 

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