VAT and how it works

Output VAT

VAT is charged by VAT registered vendors on most of their sales. They pay the VAT over to SARS as Output VAT (think of goods and services going OUT from the vendor).

Input VAT 

VAT is claimed back from SARS by registered vendors as Input VAT (think of it as the VAT on goods and services coming IN to the vendor).

Input VAT cannot normally be claimed in respect of certain supplies including entertainment, staff welfare, motor cars including twin-cabs.

The VAT in bad debts written off can be claimed back as input VAT.

Input VAT may be claimed up to five years after the transaction date. Hence if your input VAT claim in any period exceeds your output VAT liabilitiy, it is a good idea to hold back on part of the input VAT claim so that you do not find yourself in a position where SARS owes you a refund as this will often lead to an audit which can be very wasteful of your time and energy. 

Memberships

South African Institute of Chartered Accountants. Designation CA(SA)  Internationally Accredited Financial MediatorsIndependent Regulatory Board for Auditors. Designation RA<Engineering Council of South Africa. Designation Pr(Eng) Member of MENSA, the High IQ Society

 

 

 

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