VAT compliance and reporting rules in South Africa
Below is summary of the major rules provided under South African VAT rules (Value Added Tax Act. 1991). Check our country VAT guides for other jurisdictions.
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South Africa VAT country guide
| Highlights | Local term | Value Added Tax (VAT) |
| VAT Rates - standard | 15% | |
| VAT Rates - reduced | 0% | |
| VAT number format | 4123456789 (number always starts with 4) | |
| Registration threshold | ZAR 1 million per annum. Voluntary registration permitted if above ZAR 50,000 | |
| VAT Group | No | |
| VAT recovery foreign businesses | Yes | |
| Fiscal Representative | Required for non-residents except digital services | |
| Currency | Rand, ZAR | |
| Administration | Introduction | VAT was introduced from September 1991 at 10% |
| VAT laws | Value Added Tax Act. 1991. Ongoing government notices. Tax Administration Act 28 of 2011 | |
| Tax Authorities | South African Revenue Service (SARS) | |
| VAT Rates | Standard rate | 15% |
| Reduced rates | 9% - Discount of 40% off standard rate for commercial accommodation (ie hotels and related services) | |
| Zero-rated | Exports of goods and services; certain animal related products; intellectual property services; certain basic foodstuffs; certain gold supplies; international transport of goods and passengers | |
| Exempt | Financial services; medical; education; gambling and betting, residential accommodation; passenger transport; various social services | |
| Scope of VAT | Scope of VAT | Domestic supplies of goods and services; import of goods |
| Time of supply | Goods & Services (general rule) | Earlier of invoice issuance or payment for goods and services. Exceptions for credit and instalment agreements. |
| Reverse Charge | For services the earlier of issuance of the invoice or payment | |
| Continuous Services | VAT as paid or due to be paid if continuous service | |
| Imports | VAT due at time of importation | |
| Goods on approval and return | General time of supply rule applies | |
| Registration | VAT registration threshold | ZAR 1 million per annum (inc zero-rated supplies) for resident and non-resident. |
| Voluntary VAT registration | Voluntary registration permitted if above ZAR 50,000 | |
| VAT number format | 4123456789 | |
| VAT Group | No VAT group regime | |
| Non-residents | Obliged to register once over threshold with local representative and bank account for VAT payments. | |
| Fiscal Representative | Yes, VAT representative for non-residents except on digital services | |
| Digital Services | Non-residents providers and intermediaries must VAT register for B2C and B2B sales of digital or electronic services if above registration threshold. No local VAT agent or bank account required. Simplified registration via email | |
| Pre VAT registration costs | Permitted for set-up and preparation costs | |
| VAT Invoices | Issuance | Within 21 days of taxable supply |
| Content | Name, address of taxpayer; VAT number; "Tax Invoice" clearly printed; unique sequential invoice number; full description of supply (dates, quantise etc). Gross, VAT and net amounts or enough data to enable calc | |
| E-invoices | Yes, if agreed by customer. Encryption and secure digital signature. | |
| Simplified invoices | Yes if below ZAR 5,000 abridged invoice. Generally excludes customer details and details of quantity of goods or services. Simple receipt if below ZAR 50 | |
| Self-billing | Yes. Requires approval by supplier and SARS tax office | |
| Retention of invoices | Five years in South Africa (approval to store outside country may be sought from SARS) | |
| FX rules | Invoice must be in ZAR unless export supply | |
| Invoice corrections | Via credit or debit note with all details of original invoice and clearly market "Credit Note" and amount of VAT changed, reference to original invoice number, with explanation | |
| Compliance | Right to deduct | Excluded: entertainment; sporting fees or membership; motor vehicles purchase or hire |
| Call-off stock | No provision for call-off stock VAT registration avoidance. Supply deemed to have taken place even if no legal transfer | |
| Reverse Charge - B2B | VAT for imported services are the responsibility of the customer via reverse charge. Exception for digital services which requires VAT registration by non-resident if above threshold | |
| Cash discounts | Any discount taken up should be reported through the VAT return | |
| Bad debt relief | Available where the invoice is written off through the accounting records | |
| Import VAT deferment | Yes. Import VAT due at clearance of goods into SA. But regular importers may apply for 30 day postponement if provide bank guarantee | |
| VAT warehouse | Customs bonded warehouses available with zero-rating for residents and exemption for non-residents (unless approval sort). | |
| Supply & install | N/a | |
| Use and enjoyment services | N/a | |
| Capital goods adjustment period | Deduction on payment | |
| Non-residents VAT recovery | Not permitted for services; some limited recovery for goods exported within 90 days of purchase and exceed ZAR 250 | |
| VAT on Digital Services | Non-resident providers of electronic or digital services should charge VAT if above the VAT registration threshold | |
| Live events | Non-resident providers should charge VAT if above the VAT registration threshold | |
| Distance selling threshold for goods | N/a | |
| Cash accounting scheme | Yes if annual sales below ZAR 50,000 this year or previously | |
| VAT registered cash tills | n/a | |
| Statute of limitations | Three years | |
| Other | ||
| VAT Returns | Frequency | Monthly if above ZAR 30m annual turnover; Bi-monthly for most other traders |
| Filing method | eFiling, but not mandatory | |
| Deadlines (inc payments) | 25th of the month following the reporting period - or day(s) before if weekend or national holiday. Payments remitted at same time. | |
| VAT credits | Refunded within 21 days of return being submitted or interest becomes liable from SARS | |
| Corrections | Corrective return | |
| Non-residents | Same as resident taxpayers | |
| Other filings | Voluntary submissions of supporting data to transactions to avoid queries or audits. No other supplementary filings | |
| SAF-T | N/a | |
| Penalties & interest | 10% of late VAT payments or returns. Monthly interest then due for continued non payment. Further fines for misstatement or fraud | |
| B2C Distance Selling returns | N/a |
