All entities (companies, close corporations, trusts, individuals, sole proprietors or partnerships) that exceed taxable supplies of over R1mil during any consecutive 12-month period must be registered for Value Added Tax (VAT) before they exceed R1mil in taxable supplies in those 12 months.
These VAT registrations are called compulsory registrations.
Entities that earn above R50k in any consecutive 12-month period and below R1mil turnover during the same period may apply for voluntary registrations.
Once registered, a VAT vendor must levy 14% upon all sale invoices (excluding zero rated or exempt supplies as per the VAT Act of South Africa).
The VAT registration number of the VAT vendor's client (if applicable) and its own VAT number must appear on each VAT invoice.
Once Taxrek has taken care of our clients' portfolios on a monthly basis, our company would pre-determine when a corporate client would become VAT liable and will ensure that registration is seamless, thereby enabling the client to become a VAT vendor within the prescribed rules and legislation.
Registration of VAT at a late stage would cause unnecessary penalties and interest to accrue that could have been avoided by being proactive.