Navigating Taxes Part 1: Understanding VAT and what’s new from SARS

💡 Let’s break it down: 💼 VAT (Value-Added Tax) is a tax you pay when you buy goods or services. It’s how the government raises money, and if you’re running a business, you may need to register for it.

📋 Once registered, you’ll have to charge VAT on the goods and services you sell (output tax) – but only on things that are taxable. Some stuff is charged at the standard rate of 15%, while others fall under the zero rate (0%). A few select items don’t get VAT charged at all – lucky them! 🍀

Here’s the cool part: as a business owner (vendor), you can claim back the VAT you’ve paid on stuff you bought for your business (input tax). If your input tax is more than your output tax, SARS might owe you money! 💸

VAT is charged at every step of the supply chain, but don’t worry – you get credit for the VAT paid in the earlier stages, so it’s not stacked up unfairly. Oh, and don’t forget, VAT also applies to imported goods and services, so that fancy product you got from overseas isn’t VAT-free! 🌍

🆕 As of 30 March 2023, SARS has made your life a bit easier by modernizing the VAT264 form. It’s been simplified for vendors and updated to match the latest VAT laws. If you’re dealing with second-hand goods, make sure to check out the new VAT264 declaration form! Check out the SARS website for more info: https://www.sars.gov.za/types-of-tax/value-added-tax/

Want to know more tax-savvy tips to keep you financially-fit this VAT season? Head over to The Glass Castle website for more info, and to contact a professional tax consult today – to assess your business’ VAT requirements! 📲 https://theglasscastle.co.za/contact/