If your non-resident business is registering for Vat, you must appoint a Vat representative. Here’s how

43984, 19 Nov. 2014

Tags: vat, vat registration, foreign companies and vat registration

Foreign businesses or non-resident businesses aren’t Vat exempt.
If you’re a non-resident company and supply goods or services in South Africa, you must register for Vat if your supplies exceed R1 million in any 12-month period or you expect it to exceed R1 million in the next 12 months.
But Vat registration isn’t straightforward for non-resident businesses.
In terms of Vat law, you must appoint a Vat representative.
It sounds hard, but really there’s no need to panic.
Today we’ll tell you all about this appointment so you can comply. Here’s what you need to know…
Foreign companies must appoint a Vat representative when registering for Vat
The Vat Act makes it clear that you must hire a suitably qualified Vat representative who must:
  1. Be a natural person;
  1. Be a resident of South Africa; and
  1. Assume responsibility for the Vat duties and obligations of your business.
Don’t let point number three fool you.
While your Vat representative assumes responsibility for your company’s Vat duties, this doesn’t relieve your business from having to perform any duties the Vat Act imposes.
Your representative is personally liable to pay any unpaid tax, additional tax, penalty or interest where:
  • He alienates, charges or disposes of any money received or accrued on which Vat is chargeable; or
  • He disposes of or parts with any money belonging to the company which he receives after the tax, additional tax, penalty or interest becomes payable and which could’ve been used to pay such tax, additional tax, penalty or interest.
Be warned! Failing to register for Vat and appoint a representative is an offence
If your non-resident business doesn’t register, you’ll be in breach of Section 1 and Section 23 of the Vat Act and you’ll be liable for penalties and fines in terms of the Tax Administration Act.
You could face an R80 000 fine or two years in jail.
Remember, your foreign company doesn’t need to have a permanent establishment or physical presence in South Africa to be liable for Vat registration, it just needs to carry out an enterprise. And, if turnover from its South African enterprise is more than R1 million, it’s compulsory to register. Make sure you comply and most importantly, appoint a Vat representative now that you know all about this appointment.

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