How To Fill In Vat Return Online In South Africa?

ByMandla

The South African government has established a VAT refund mechanism that allows qualifying purchasers to recover the 15% VAT they paid on the acquisition of goods. At the time of departure from South Africa or when the qualifying purchaser exports the goods from South Africa, he must claim the VAT refund. 

In South Africa, submitting your Value Added Tax (VAT) return online can seem daunting, but with a bit of guidance, you’ll have no trouble. With the help of this comprehensive guide, you can navigate the SARS eFiling platform with confidence.

VAT Registration

Foreign providers must register for VAT if their total annual income in South Africa exceeds ZAR 1 million on a rolling calendar basis. Businesses seeking VAT registration do not need to appoint a fiscal representative, which is required in most other overseas registrations. Similarly, e-service providers do not need to have a local bank account.

What is a VAT return?

Upon registering your business for VAT, you must charge VAT on all taxable sales (output VAT). Moreover, VAT charged by the business on purchases may also be reclaimed (referred to as input VAT). If your output VAT is higher than your input VAT, you will have to pay the difference at the end of your accounting period. If the output VAT is lower, you will be able to claim a refund.

Online filing VAT Return

Category C taxpayers must file their VAT returns electronically. Other businesses can also file electronically or by mail. SARS eFiling is the only method of making electronic submissions.

  • You will need a username and password to log in, which you can obtain by registering at: https://www.sarsefiling.co.za/Register.aspx.
  • The first step for businesses is to register for eFiling for VAT purposes once they have logged in. From the “Organisation” menu option, select “Organisation Tax Types” and then click on “VAT 201”. You will be prompted to enter the reference number and tax office of your business there. “Return successfully activated” will appear in the status bar upon activation.
  • To file VAT returns, businesses must select “Returns Issued” and select VAT 201. You will now be able to submit an electronic VAT return.
  • A context-sensitive help system is available at every step of the submission process.

Who needs to register for VAT?

Any business must register for VAT if its income in any successive 12-month period exceeds or is expected to exceed R1 million. Any business that has earned more than R50 000 in the previous 12 months may choose to register voluntarily. A small business that is registered as a micro business under the Sixth Schedule of the Income Tax Act can also register for VAT and choose to submit returns and payments every four months, on the last day of June, October, and February.

How to Go About Claiming Your Refund?

The only thing you need to do is identify yourself as a tourist and request an invoice for the goods you purchased. Here is a list of the information that must be included in a Tax Invoice:

  • Address and name of the buyer. 
  • A full description and quantity of the goods purchased.
  • An invoice number that is serialized and unique.
  • The amount of VAT charged, or a statement that the total cost of the goods includes VAT at 15%.

South African Penalties For Not Filing VAT Returns

A VAT-registered business is legally obligated to file VAT returns and pay VAT liabilities on time. There can be serious consequences for failing to do so, including penalties, interest, and even criminal prosecution. Non-filing of VAT returns in South Africa can result in the following penalties:

  • If a VAT return is not filed on time (if registered for VAT), there will be a 10% penalty.
  • If you do not pay the VAT due on time, you will be penalized by 10%.
  • If SARS finds that your VAT liability has been understated intentionally or negligently or that you have claimed excessive input taxes, you may be subject to an additional tax of up to 200% of what should have been paid.
  • Failure to submit a VAT return without reasonable cause or with intent to evade tax is a criminal offense punishable by fines or imprisonment of up to two years, or both.

FAQs

How long would it take me to obtain my VAT refund?

If a seller is entitled to a VAT refund, SARS must pay the refund within 21 business days of receiving the correctly completed VAT return or all the supporting papers for the VAT refund, without charging any interest.

Once I open a new VAT201 submission, will my changes be automatically included?

Once the VAT201 wizard has been launched, your data will be uploaded. Should there be any updates, restart the wizard to incorporate them. You will need to submit a new VAT201 report if you reopen a closed VAT period.

Is it possible to claim VAT after leaving South Africa?

On a temporary visit to South Africa, non-resident foreign passport holders, as well as South African passport holders who are permanently resident in an export country, may claim a refund of VAT paid on movable goods purchased from VAT-registered vendors, which they export upon leaving South Africa.

What is the process for claiming VAT back when leaving South Africa?

It is mandatory to present the tax invoices, along with all the items on which a VAT refund is claimed, to the VAT Refund Administration for inspection and endorsement before leaving South Africa.

What is the South African VAT rate at the moment?

The standard VAT rate is 15%. South Africa has a very small number of transactions that do not require VAT. SARS registers businesses as ‘vendors’ and collects tax on all taxable supplies throughout the manufacturing and distribution process.

When is the VAT submission deadline?

Vendors are required to submit VAT returns and make payments (or claim a refund) on or before the 25th day following the month in which their tax period ends (if they are registered for eFiling).

What is the formula for calculating my VAT refund?

It is simple to calculate VAT. When working out VAT, you will compare the amount you paid on purchases with the amount you collected on sales, unless you are using a flat-rate scheme. A positive number means you have to pay that amount. You’ll receive a refund if the number is negative.

Conclusion

You don’t have to be overwhelmed when it comes to filling out your VAT return online in South Africa. Using the SARS eFiling platform, you can easily complete the process and stay in compliance with tax regulations. SARS may contact you with questions about your records, so make sure you keep them organized and respond as quickly as possible. You can calculate VAT by yourself with our VAT Calculator.

Mandla

Mandla is a highly skilled financial expert specializing in taxation and VAT. With a Bachelor's degree in Accounting and professional certifications as a Certified Tax Practitioner (CTP), Mandla possesses a deep understanding of South Africa's tax system. With over a decade of experience, he has provided valuable guidance to a diverse range of clients, including small businesses and multinational corporations. Mandla's expertise and analytical approach make him a trusted advisor in navigating the complexities of VAT calculations in South Africa.

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