What is Input VAT - how to calculate it
Input VAT is the VAT calculated on the Sales made by a vat registered business. The output VAT must be paid over to SARS and is a liability in the books of the business.
When Sales are processed a portion of that sale will be credited to the VAT control account of the business.
Currently standard rate of VAT is levied at 15%.
Frequently asked questions:
How do I calculate Input VAT?
Gross Deductible Purchases / 115 x 15 = Input VAT
What is a deductible purchase?
Any purchase made from another vendor in the production of income.
Is VAT input an expense?
Input VAT is claimed on purchases which by their nature are expenses with the exception of Assets and other trade receivables.
What is the VAT return called?
It is a VAT201.
What is subject to VAT?
When you are registered for VAT then you are classified as a Vendor and all goods or services provided by your business will be seen as taxable supplies. With the exception of VAT exempt supplies.
When must VAT be paid?
You are liable for the VAT on the earlier of receipt of cash or invoice.
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