Lesson 5-VAT

Question 1

What is VAT

Answer 1

An indirect tax levied/charged by the government on the consumption of goods and rendering services

Question 2

How Does NAMRA receive VAT

Answer 2

Consumer pays VAT to vendor and it is the vendors responsibility to pay VAT t government receiver of revenue

Question 3

At what rate is VAT levied

Answer 3

15 Percent

Question 4

VAT is tax levied on….

Answer 4

Transactions (supply of goods and rendering of services)

Question 5

Who must register for VAT

Answer 5

Entities with an annual turnover of more than 1 million rand

Question 6

What is output tax

Answer 6

A vendor must levy VAT at 15 percent on transactions as part of their price

Question 7

What must be refelected on tax invoice for it to be considered valid

Answer 7

1. The words “tax invoice” in a prominent place
2. Name, address and VAT registration number of the supplier
3. Name and address of recipient
4. Serial number and date of issue
5. Accurate description of good and or services
6. Quantity or volume of goods or services supplied
7. Price and VAT
8. The VAT number of the recipient will also be required on a full tax invoice if the person is a vendor

Question 8

What are standard rate transactions

Answer 8

Transactions which are subjected to VAT at a rate of 15 percent

Question 9

What is input tax

Answer 9

When a vendor purchases a good/service from another vendor and there is VAT on the transaction, the purchaser can claim the VAT from SARS

Question 10

How do you calculate VAT payable

Answer 10

Output tax - input tax

Question 11

What will happen if VAT payment is made late or the applicable return is not submitted on time

Answer 11

SARS may levy penalties and fines