Page 32 - Profmark Tax Guide 2025

VALUE-ADDED TAX (VAT)

The VAT system comprises of three types of supplies:
■ Standard-rated supplies – supplies of goods and services subject to the VAT
rate in force at the time of supply. The current vat rate is 15%.
■ Exempt supplies – supplies of certain services not subject to VAT. Vendors
making exempt supplies are not entitled to input VAT credits
■ Zero-rated supplies – supplies of certain goods or services subject to VAT at
zero percent. Vendors making zero-rated supplies are entitled to input VAT
credits

Key features
■ Enterprises with a turnover of less than R1 000 000 in any period of
12 months are not obliged to register for VAT
■ Enterprises with a turnover of less than R50 000 in any period of 12 months
are not permitted to register for VAT
■ VAT returns are generally submitted on a two monthly basis unless turnover
in any period of 12 months exceeds R30 million, in which case returns are
submitted monthly
■ Vendors may reclaim the VAT element on expenditure incurred for the
purpose of making taxable VAT supplies except on, entertainment, excluding
qualifying subsistence, passenger vehicles (including hiring) and club
subscriptions
■ Input tax credits may not be claimed on expenditure relating to exempt
supplies
■ Input tax credits may only be claimed upon receipt of a valid tax invoice
■ In order to be a valid tax invoice the name, address and VAT registration
number of the recipient and supplier must appear on tax invoices where the
VAT inclusive total exceeds R5 000
■ A deposit is not subject to output VAT until the supplier applies the deposit
as consideration for payment
30