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What is VAT South Africa?

Author

Matthew Cannon

Updated on March 04, 2026

What is VAT South Africa?

VAT Rates in South Africa
The standard rate of VAT is 15%. Exports, certain foodstuffs and other supplies are zero-rated, and certain supplies are exempt (mainly certain financial services, residential accommodation and public transport).

Simply so, how does VAT work in South Africa?

As a business owner in South Africa, VAT only applies to items sold within the country or on items that are imported into South Africa. The current standard rate is 15% on most goods and services and imported items, with certain items exempted or charged at a zero rate, such as exports.

Likewise, what is the VAT rate in South Africa 2019? 15%

Furthermore, how much is VAT in South Africa?

VAT is now levied at the standard rate of 15% on the supply of goods and services by registered vendors. The tax rate was 14% until 31 March 2018. A vendor making taxable supplies of more than R1 million per annum must register for VAT.

What is the VAT rate in South Africa 2020?

15.00 percent

What can I claim VAT back on in South Africa?

Apply for a VAT refund. Foreign visitors to South Africa may claim back the value added tax (VAT) paid on items which they take out of the country when the total value exceeds R250. The application for a refund must be lodged with the VAT Refund Administrator's offices.

Can you claim VAT on gas in South Africa?

The supply of fuel, diesel and illuminating kerosene is specifically zero-rated in terms of sections 11(1)(h) and (l) of the VAT Act, read with Part 5A of Schedule 1 of the Customs and Excise Act. The supply of liquid gas by a VAT vendor is therefore a standard rated supply (i.e. subject to VAT at (currently) 14%)).

Is education exempt from VAT in South Africa?

The provision of educational services and the supply of ancillary goods and services directly related thereto and necessary to provide educational services are exempt from VAT. These activities may constitute taxable supplies for VAT purposes.

What items are exempt from VAT in South Africa?

South Africa's VAT system includes 19 basic food items that are zero-rated:
  • dried beans.
  • samp.
  • maize meal.
  • rice.
  • brown bread.
  • vegetables.
  • fruits.
  • vegetable oil.

How far back can you claim VAT in South Africa?

five years

Is VAT charged on interest in South Africa?

A: VAT is in terms of section 7(1) of the VAT Act is charge on the supply of goods and services. In our view a loan and the interest thereon constitutes a supply of money and no VAT is chargeable thereon.

Is VAT charged on electricity in South Africa?

Residential customers make up an estimated 20% of total electricity sales. For one thing, the allowable tariff increase announced by the National Electricity Regulator of SA (Nersa) on Thursday does not include VAT. 58% of all consumers buy directly from the electricity utility while 42% buy from municipalities.

Is VAT a cost of sale?

Tax (VAT) is not based on the difference beteween sales and cost of goods, it is based on either your purchase cost and sales price and, in most cases is 15%. If registered, VAT is a business expense, as it applies to (almost) everything. COGS is everything related specifically/uniquely to the product.

What is the current VAT rate 2019?

Standard VAT rate (20%)
The standard VAT tax applies to all sales transactions of goods or services that are not part of the other levels. The VAT increased from 17.5% to 20% on 4 January 2011.

How is VAT calculated?

VAT calculation formula for VAT exclusion is the following: to calculate VAT having the gross amount you should divide the gross amount by 1 + VAT percentage (i.e. if it is 15%, then you should divide by 1.15), then subtract the gross amount, multiply by -1 and round to the closest value (including eurocents).

How much do I need to earn to pay tax in South Africa?

The SA Revenue Service announced on Tuesday that it has lifted the tax return threshold from R350 000 to R500 000. This means that people who earn less than R500 000 per year, and meet certain other criteria, will not need need to file tax returns, commissioner Edward Kieswetter said at a media briefing in Pretoria.

How many percent is tax in South Africa?

South Africa TaxesLastUnit
Corporate Tax Rate28.00percent
Personal Income Tax Rate45.00percent
Sales Tax Rate15.00percent
Social Security Rate2.00percent

How is VAT calculated in South Africa?

VAT is calculated by multiplying the VAT rate (15% in South Africa) by the total pre-tax cost. The cost of VAT is then added to the purchase.

What is VAT example?

A value-added tax (VAT) is a consumption tax levied on products at every point of sale where value has been added, starting from raw materials and going all the way to the final retail purchase. For example, if a product costs $100 and there is a 15% VAT, the consumer pays $115 to the merchant.

Do you pay VAT on all turnover?

The big advantage of this it is means you don't have to keep a record of the VAT you charge on every sale. And you don't have to pay on every purchase. Instead, to make it easier and quicker to do your VAT return, you can calculate your VAT payments as a percentage of your total turnover.

Do I need to pay VAT?

When your business income reaches the VAT registration threshold, you will need to consider whether you need to register for VAT. For example, if your VAT taxable turnover exceeds £85,000 for the twelve months to 31 August 2019, you need to register for VAT by 30 September 2019.

How much is the VAT now?

Different rates of VAT apply to different goods and services. There are currently three rates - the standard 20% (increased from 17.5% on 4 January 2011), a reduced rate charged at 5% and zero rate.

When did sa VAT rate change?

1 April 2018

What is the difference between tax and VAT?

Tax is actually a mandatory or compulsory financial charge imposed on the tax payers by the Government. whereas VAT is a type of tax, there are many types of tax such as income tax, general sales tax (GST), wealth tax, sales tax, value added tax (VAT). Value Added Tax (or VAT) is an indirect tax.

Why do we pay VAT?

It is like a fee which we pay to government for funtioning in its territory. For example, income we earn on a territory, we have to pay income tax to the respective government on whose territory such income is earned. Similarly, VAT (value added tax) is a form of tax levied on sale of goods.

Are bank charges exempt from VAT?

Bank charges are exempt from VAT and must be posted with T9 i.e. they will not appear on the VAT return.

Can you charge VAT if you are not VAT registered South Africa?

You must not charge VAT if your business is not registered for VAT. However, VAT registered businesses must charge VAT on their taxable supplies of goods and services and can reclaim the VAT they have paid that relates to the supplies on which they have charged VAT.

Is VAT going up 2020?

Treasury increased the VAT rate to 15% (from 14%) on 31 March 2018. But more importantly, we expect the government to increase the VAT rate by 1 percentage point to 16% in the 2020 Budget…

What is South African tax?

Up to R195,850: 18% of taxable income. R195,851–R305,850: 26% (R35,253 plus 26% of taxable income above R195,850) R305,851–R423,300: 31% (R63,853 plus 31% of taxable income above R305,850) R423,301–R555,600: 36% (R100,263 plus 36% of taxable income above R423,300)

Did tax rates go up in 2020?

The 2020 tax rates themselves didn't change. They're the same as the seven tax rates in effect for the 2019 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, the tax bracket ranges were adjusted, or "indexed," to account for inflation.

How does VAT work for small businesses?

Most businesses collect more VAT from their customers than they pay to their suppliers. They then fill in a quarterly VAT return, and pay the surplus to HMRC. If you need to register, you have to account for VAT whenever you supply goods and services.

When can I submit my tax return 2020?

All Americans now have until July 15, 2020, to file their federal income tax returns for 2019 and pay any tax they may owe. The deferral is automatic — you don't need to file any forms or call the IRS to qualify for the new deadline.

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