The four golden rules of Vat registration

43984, 29 Oct. 2014

Tags: sars, vat registration

Vat registration has been around for some time now. Despite this, it remains a complex issue that many vendors struggle to grasp.
As a result, they end up making mistakes or worse, not registering which then opens the door to SARS penalties.
The good news is we’re here to help.
Keep reading to discover the four golden rules of Vat registration so you can comply with Vat law and avoid SARS penalties.
Here are the four golden rules of Vat registration
Rule 1: If you run a business, find out if it’s an enterprise or not.
In terms of section 1 of the Vat Act, operating an enterprise is a basic requirement for Vat registration. (Familiarise yourself with this particular section of the Vat Act to find out whether or not you run an enterprise.)
Rule 2: If you’re operating an enterprise, check your turnover to see if you qualify for Vat registration.
If your turnover threshold over any 12-month period (not a financial year) is:
  • More than R1 million, you’re legally liable to register for Vat;
  • Less than R1 million, but more than R50 000, you can voluntarily register; and
  • Less than R50 000, you can’t register for Vat.
Rule 3: If you run a foreign business that’s an enterprise in South Africa, you may have to register for Vat.
In terms of the Vat Act, 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.
Rule 4: Once you get your Vat number, check your tax period and make sure your first Vat return isn’t late.
We hope these four Vat registration rules will make it easier for you to comply with Vat law and avoid SARS penalties.

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