Basic rules related to VAT
Duration: 0.15 hour
Price: R49.00
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Overview
Value-Added Tax (‘VAT’) is a tax on the consumption of goods and services in the economy and is levied in terms of the Value-Added Tax Act 89 of 1991. VAT is an indirect tax, which means that the tax is not directly assessed by SARS, but indirectly through the taxation of consumption of goods and services. Revenue is raised for the government by requiring a business, that carries on an enterprise (as defined in section 1(1) of the VAT Act), to register for VAT. In doing so, the business will charge VAT on supplies of goods and services made by it, on the importation of goods and imported services (subject to certain conditions). The business will also be entitled to deduct any VAT charged to it, or under limited circumstances from a business that is not registered for VAT, in respect of a supply made to it. VAT is therefore non-cumulative, meaning that a credit/deduction is allowed for VAT paid in previous stages, within the production and distribution chain. The business is required to pay the difference between the VAT charged by it and the VAT charged to it or claim a VAT refund where the VAT charged to it exceeds the VAT charged by it.
Almost every time a consumer purchases goods or services from a business in South Africa, this consumer must pay a price that includes value-added tax (VAT). Since 1 April 2018 VAT is levied at a rate of 15% (previously 14%). There is a limited range of goods and services which are subject to VAT at the zero rate or are exempt from VAT.
Short course content (self-paced)
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Basic rules related to VAT
Competencies developed in this short course (self-paced)
- Understand the basic VAT principles by referring to the core definitions in the VAT Act.
- Perform a basic VAT calculation.
- Explain how to declare output tax and input tax to SARS.