VAT Flashcards
value added tax and tax payable to SARS
amount from the accounting records are including VAT. true or false
false
output VAT
amount of VAT that can be charged on suppliers MADE by the vendor.
goods and services that gets out of the company.
Vat definantion for tax 2AB
VAT is levied on supply of goods and services by vendor in furtherance of his enterprise,
when must a taxpayer register to be Vat Vendor
The value of taxable suppliers is already/or will exceeds R1 000 000 for a 12-month period.
when can a taxpayer register to be a VAT vendor
when his taxable suppliers exceeds 50 000
Amount from the accounting records are including VAT ( true of false )
False
Vendors do not have to charge VAT on cash transactions (True or false)
False
“Open market value” for VAT purposes excludes VAT (true or false)
False
The VAT rate has been 15% since
1 April 2018
If the VAT return is submitted 1 day late it will be subject to
a 10% penalty
“Consideration” as defined includes VAT (True or false)
True
If the VAT period for a vendor ends on 31 January 2024, and he submits the return and payment electronically, the return must be submitted by
29 February 2024
There are no VAT consequences when a VAT vendor ceases to be a VAT vendor (True or False )
False
“Value” as defined includes VAT (true or false )
False
You can always assume that a quotation includes VAT, unless indicated that VAT at15% should still be added (True or False )
True
True or False: A vendor with a two-month tax period must submit two separate VAT returns for each month within that period
False. They must submit a single return for those two months by the business day of the following month.
True or False: SARS categorizes vendors into different VAT categories based on their turnover and industry.
True. SARS determines the category a vendor falls into for VAT purposes.
True or False: Manual VAT returns have a later submission deadline compared to electronic VAT returns
False. Electronic VAT returns have a later submission deadline than manual VAT returns
True or False: Vendors in Category C must file VAT returns quarterly.
False. Vendors in Category C must file VAT returns monthly.
True or False: Category E vendors have a tax period that aligns with the income tax year end.
False. The tax period for Category E vendors does not align with the income tax year end.
True or False: If VAT is paid late, a penalty of 5% is incurred.
False. A penalty of 10% is incurred for late payment of VAT.
True or False: Category A or B vendors must notify SARS in writing if their turnover increases to more than R30 million.
True. Category A or B vendors must notify SARS in writing if their turnover increases to more than R30 millio
When does a vendor falls under category C. (explain the whole thing)
Every month is a tax period. A vendor falls into category C if the total value of taxable suppliers exceeds R30 million in a 12-month periods.
What is the deadline for submitting electronic VAT returns, and how does it differ from manual VAT returns?
Electronic VAT returns must be submitted by the last business day of the month after the end of the tax period. Manual VAT returns must be submitted by the 25th day of the month following the end of the tax period.
What are the tax periods for vendors in Categories A, B, D, and E, and how do they differ?
*Category A: Every 2 months to the end of January, March, May, July, September, November
*Category B: Every 2 months to the end of February, April, June, August, October, December
*Category D: Every 6 months to the end of February and August
*Category E: Every 12 months, ending on the last day of the assessment of the vendor, which can apply for a different period end.
Does the tax period for VAT purposes align with the income tax year end?
No, the tax period for VAT purposes does not align with the income tax year end.( Tax period has nothing to do with the income tax year end. )
when was VAT introduced in SA
1991
A full tax invoice must contain the following information: (name 6 )
The words ‘tax invoice’, ‘VAT invoice’ or ‘invoice’
The name, address and VAT registration number for the supplier
The name, address and VAT registration number of the recipient(if available)
An individual serialized number.
The date upon which the invoice is issued
A description of good or service supplied
What are the requirements regarding VAT registration information on invoices for transactions amounting to R5,000 or less?
What are the requirements regarding VAT registration information on invoices for transactions amounting to R5,000 or less?
When are debit and credit notes issued, and what information must they contain?
Debit and credit notes are issued if there are any changes to the original tax invoice. They must reflect all the information found in a tax invoice
Is it mandatory for debit and credit notes to have a serial number?
No, debit and credit notes do not have to include a serial number
For transactions involving a supply of R50 or less, what document can be provided to the recipient instead of a tax invoice
For transactions totaling R50 or less, it is not necessary to issue a tax invoice. The supplier can provide the receiver with any document acceptable to SARS.
What is the procedure for a vendor to cancel their registration with SARS if they no longer meet the requirements?
A vendor can cancel their registration if they no longer meet the requirements. They must inform SARS within 21 days so that their registration can be cancelled.
What types of vehicles fall under the definition of a “motor car” for VAT input denial purposes?
The types of vehicles falling under the definition of a “motor car” for VAT input denial include motor cars, station wagons, minibusses, double cab light delivery vehicles, and any other motor vehicle mainly for carrying passengers with three or more wheels used on public roads
Which vehicle are excluded from the definition of motor car and therefore vat can be claimed on?
o Vehicles capable of accommodating only one person or
o Suitable for carrying more than 16 people.
o Caravans
o Ambulances
o Vehicles of unladen mass of 3 500 kilograms or more
o Special game viewing vehicles or
o Hearses ( koloi ya dikese )
True or False: A vendor can claim input VAT on the purchase of a motor car if they are not a motor dealer
False
True or False: Caravans are excluded from the definition of a “motor car” for VAT input denial purposes
True
True or False: VAT input can be claimed on accessories for a motor car, regardless of their intended purpose.
False
While vendors can generally claim VAT input on certain expenses related to motor cars, such as repair, maintenance, insurance, and certain accessories, there is an exception for accessories intended for entertainment purposes. If an accessory for a motor car is primarily for entertainment, such as a digital music player or a DVD player, the vendor cannot claim VAT input on that specific accessory.
True or False: A motor dealer is exempt from the VAT input denial on motor cars.
True
True or False: The VAT input denial for motor cars is based on the vendor’s intention rather than the factual use of the vehicle
False
True or False: A vendor can claim VAT input on fees or subscriptions paid for membership of any club, association, or society of a sporting, social, or recreation nature
False
True or False: VAT input denial applies to fees or subscriptions paid for membership of a professional association
False
Provide examples of activities that fall under the definition of “entertainment” according to the given provision.
Entertainment includes food, beverages, accommodation, amusement, recreation, or hospitality provided by a vendor.
Bank costs is supplied at
standard rated 15%
Bad debts are rated at
15 %
Deposits are rated at
not yet consideration
salaries and wages are rated at
not included in the definition of enterprise
electricity and water rated at
15%
