Medical expenses in South Africa can be quite high, especially for those without medical aid coverage. Many South Africans pay monthly contributions to medical aid to get coverage for doctor’s visits, medication, hospital stays, and more. But can you claim back the VAT you pay on these medical aid contributions?
VAT on Medical Expenses
When it comes to healthcare and medical expenses, South Africa does make provision for some VAT exemptions and deductions in certain cases. But the rules can be tricky to navigate. In general, you cannot claim back the VAT on medical aid membership fees and monthly contributions. This is because medical schemes are exempt from charging VAT on subscriptions and contributions.
However, you may be able to claim back VAT on some related medical expenses.
When Can VAT Be Claimed?
There are a few instances when you can claim back the VAT paid on medical expenses in South Africa:
Private Health Care Providers
Most private hospitals, doctors, specialists, and other health practitioners charge VAT on their services. This means VAT-registered companies and individuals may deduct the VAT portion of these expenses when submitting VAT returns.
So if you paid any private medical expenses out of your pocket without claiming from your medical aid, you may be able to deduct the VAT amount. The key is having paid the expense yourself, as the medical aid will account for VAT in their returns.
Medical Devices and Equipment
Some medical devices and equipment are taxed at a rate of 15% VAT in South Africa. This includes things like wheelchairs, crutches, glucometers, hearing aids, adjustable beds, and more. In many cases, the VAT on these items can also be claimed back by VAT-registered taxpayers when submitting returns.
Medicines and Pharmaceuticals
While basic over-the-counter medicines are zero-rated, most prescription medicines and specialized pharmaceuticals still attract VAT at 15%. Again, in this case, VAT-registered patients paying these expenses themselves may be eligible to claim back this portion of the cost.
How To Claim VAT on Medical Expenses
Claiming back VAT on medical expenses in South Africa requires a few simple steps:
- Maintain your tax invoices showing the VAT portions for medical expenses paid out of your pocket
- Compile all documentary proof of payment of these invoices
- If registered, complete a VAT201 return reflecting the input tax deduction
- Include copies of invoices and proof of payment
- SARS will process the return and refund any eligible VAT amounts
Without proper documentation, invoices, and proof of payment you cannot claim back any VAT from SARS. So be sure to keep diligent records if you want to recoup VAT.
Common VAT Claim Scenarios
To give you a better idea, these are a few examples of common medical expense VAT claims in South Africa:
Joseph paid R5 000 to a private cardiologist for a consultation. The total includes R625 in VAT (15% of R4,175). As a VAT-registered taxpayer, Joseph submits the invoice and proof of payment along with his VAT201 return to SARS and claims back the R625 input VAT.
Thandi purchased a new pair of prescribed glasses for R3 000 cash. This total includes R375 in VAT (15% of R2,500). Although not VAT-registered, Thandi submits her receipt and proof of payment to claim back the R375 VAT portion.
ABC Company’s employee had to undergo emergency spinal surgery at a private hospital. The total bill was R120,000 which includes R15,000 VAT (15% of R105,000). ABC Company can claim back the R15,000 input VAT by submitting documentation with its VAT returns.
As you can see, various medical expenses can count for VAT deductions as long as the expenses were settled directly by the taxpayer and not claimed from a medical aid scheme.
Important Things to Note
There are certain nuances to understand when claiming VAT on medical expenses:
- Services and devices supplied by public hospitals and government healthcare facilities are exempt from VAT and do not allow claims
- You cannot claim VAT on medical aid membership fees or monthly contributions
- Medical expenses paid for family members may still be eligible for VAT claims
- For companies, medical expenses should be for employees to allow input of VAT
- By understanding these provisions, you can ensure VAT claims are valid and compliant with SARS rules.
Can I claim VAT on my medical aid membership fees?
No, you cannot claim back the VAT on monthly medical scheme contributions or membership fees. Medical aids are exempt from charging VAT on subscriptions.
What about contributions to a medical savings account?
Unfortunately, contributions made to a medical savings account linked to your medical aid also do not allow you to claim VAT. These are still considered part of the overall medical scheme contributions.
If my medical aid only partly paid an expense, can I claim the VAT on the portion I paid?
Yes, you may claim back the VAT on the part of any medical expense that you settled yourself. For example, if your aid only covered 70% of a hospital fee, you can claim VAT on the 30% portion you directly paid.
Can I claim VAT if medical expenses were paid by a family member?
As long as a family member settles the required medical expenses from their pocket, and submits the VAT returns and proper documentation, it is possible to claim back the VAT portion. So spouses or parents can claim VAT for children’s medical costs for example.
What types of documents do I need to submit a VAT claim?
To claim back VAT on medical expenses, you need to submit the following documentation:
Tax invoices/receipts showing the VAT portions charged; Proof of payment reflecting the expense was settled directly by yourself; Completed VAT201 return with details of the input VAT amounts claimed
How far back can I claim VAT on medical expenses?
You may generally claim VAT going back up to 5 years, as long as you still have the proper supporting documentation. Any valid medical expense VAT paid in the past 5 years can still qualify to be claimed back from SARS by following the correct protocols.
In summary, while monthly medical aid contributions do not allow VAT claims in South Africa, other supplementary medical expenses paid out-of-pocket may qualify for deductions. By maintaining thorough records and following SARS protocols, you can claim back this portion to help offset the costs of quality private healthcare. Just be sure to consult an accountant or tax practitioner to ensure your specific expenses and situation meet all requirements. Moreover, if you want to calculate VAT then use our VAT Calculator.