VAT

Question 1

Zero-rated items

Answer 1

VAT is charged at 0% on specified items
(can change at any time - to help the poor people)

Question 2

VAT exempt items

Answer 2

No VAT is/can ever be on these goods
(usually have a different tax on them)

Question 3

Invoice basis

Answer 3

VAT is declared or claimed when the invoice is issued or received
(automatic accounting basis)

Question 4

Payments basis

Answer 4

VAT is declared when payment is received or made
(special application basis)

Question 5

Input VAT

Answer 5

Paid by/Charged to a business when goods/services are purchased from another VAT vendor. Input VAT is included in the cost of the goods/services

Question 6

Output VAT

Answer 6

Charged by a VAT vendor when it sells goods or renders services. Output VAT is included in the selling price of the goods/services.

Question 7

VAT Vendor registration

Answer 7

Compulsory - annual taxable income is more than R1 million
Optional - annual taxable income is between R500 000 and R1 million

Question 8

What do you pay to SARS

Answer 8

The difference between the VAT Input being claimed and the VAT Output that needs to be paid
Output > Input = Pay to SARS
Input > Output = Receive from SARS

Question 9

Collection period

Answer 9

VAT Vendors are obligated to collect and pay VAT to SARS within 25 days after the 2 month period

ie VAT collected in the January/February period must be submitted by 25 March