VAT Modernisation Discussion Paper - the future is here
The modernisation of the South African VAT return Landscape is happening right in front of our eyes.
What does this mean?
It boils down to digital VAT. Digital VAT means a superior ability to pick up errors and discrepancies, it is also much easier to gather data on activities. This will enable the revenue service to triangulate your information.
On 8 September 2023 SARS published a discussion paper on the modernisation of South African VAT and it is clear that SARS is busy doing the groundwork needed to progress into digital VAT.
If you are a VAT Vendor or a VAT registered business with taxable supplies above R1million then you want to make sure your affairs are in order because VAT is levelling up as the new technology is introduced.
Important to note is that the revenue service has access to more data than most actually think. This ability to scrutinize activities means there is information on your affairs that the revenue service could access in a flash. New technology is what bridges this gap for SARS, the includes digital VAT.
What many taxpayers are not aware of is that SARS has access to the information on their bank accounts and if you are making money and not making tax declarations, then this will be a clear red flag, making you someone that would pop up on the radar.
Filing your VAT returns timeously and correctly is paramount and if you can then try go digital as soon as possible so that your business is completely compliant when VAT does become fully digital.
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Frequently asked questions
How do I go Digital with VAT?
This essential requires an online accounting system. Accounting systems like Xero now integrate directly with SARS efiling and enable the direct filing of VAT returns. Accounting firms like Zeelie Professional Accountants SA can assist if you are signed up for making tax digital for vat.
What is the VAT Administrative Framework?
The VAT Administration Act oversees value added tax of the supply of goods and services and the importation of goods.
When must you submit your VAT returns?
This depends on your VAT Category - the general rule for understanding purposes is the 25th of the month following the reporting period.
Can I use online services for Digital VAT?
Yes. Most accountants and tax practitioners now work on compatible software packages like Xero and Sage and this allows for digital records and the ability to also submit your VAT online and directly to SARS.
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