What is a VAT Return
Value-added Tax is declared via a VAT Return. The VAT Return details the Output VAT from Sales and the Input VAT from Purchases. The net result is VAT Payable of Refundable.
VAT Returns must be declared as per the VAT Act 89 of 1991 failure to do so could result in penalties, interest or worse.
Many vat refunds now result in an audit where South African Revenue Service verifies the legitimacy of the claims. This is as a result of many returns being lodged where the amount of vat claimed back is fictitious in an attempt to defraud the tax system. If is therefore essential that your vat returns are completed accurately.
Frequently asked questions
Is VAT the same as income tax
Value-added tax (VAT) is a flat tax rate levied on an item. It is similar to a sales tax in some respects, except that with a sales tax, the full amount owed to the government is paid by the consumer at the point of sale.
Who pays VAT
A buyer pays VAT to sellers and if a buyer sells goods or services to its own customer base and meets the threshold for VAT registration, it will charge VAT itself and pay this to the revenue service.
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