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South Africa VAT guide

VAT compliance and reporting rules in South Africa

Below is summary of the major rules provided under South African VAT rules (Value Added Tax Act. 1991). Check our country VAT guides for other jurisdictions.

Our VAT Calculator & VAT Filer products on a single platform, VAT Calc, are unique in that they come with all of this included out-of-the box for South African and scores of other countries around the world.

South Africa VAT country guide

Highlights Local term Value Added Tax (VAT)
VAT Rates - standard 15%
VAT Rates - reduced 0%
VAT number format 4123456789 (number always starts with 4)
Registration threshold ZAR 1 million per annum. Voluntary registration permitted if above ZAR 50,000
VAT Group No
VAT recovery foreign businesses Yes
Fiscal Representative Required for non-residents except digital services
Currency Rand, ZAR
Administration Introduction VAT was introduced from September 1991 at 10%
VAT laws Value Added Tax Act. 1991. Ongoing government notices. Tax Administration Act 28 of 2011
Tax Authorities South African Revenue Service (SARS)
VAT Rates Standard rate 15%
Reduced rates 9% - Discount of 40% off standard rate for commercial accommodation (ie hotels and related services)
Zero-rated Exports of goods and services; certain animal related products; intellectual property services; certain basic foodstuffs; certain gold supplies; international transport of goods and passengers
Exempt Financial services; medical; education; gambling and betting, residential accommodation; passenger transport; various social services
Scope of VAT Scope of VAT Domestic supplies of goods and services; import of goods
Time of supply Goods & Services (general rule) Earlier of invoice issuance or payment for goods and services. Exceptions for credit and instalment agreements. 
Reverse Charge For services the earlier of issuance of the invoice or payment
Continuous  Services VAT as paid or due to be paid if continuous service
Imports VAT due at time of importation
Goods on approval and return General time of supply rule applies
Registration VAT registration threshold ZAR 1 million per annum (inc zero-rated supplies) for resident and non-resident. 
Voluntary VAT registration Voluntary registration permitted if above ZAR 50,000
VAT number format 4123456789
VAT Group No VAT group regime
Non-residents Obliged to register once over threshold  with local representative and bank account for VAT payments.
Fiscal Representative Yes, VAT representative for non-residents except on digital services
Digital Services Non-residents providers and intermediaries must VAT register for B2C and B2B sales of digital or electronic services if above registration threshold. No local VAT agent or bank account required. Simplified registration via email
Pre VAT registration costs Permitted for set-up and preparation costs
VAT Invoices Issuance Within 21 days of taxable supply
Content Name, address of taxpayer; VAT number; "Tax Invoice" clearly printed; unique sequential invoice number; full description of supply (dates, quantise etc). Gross, VAT and net amounts or enough data to enable calc
E-invoices Yes, if agreed by customer. Encryption and secure digital signature.
Simplified invoices Yes if below ZAR 5,000 abridged invoice. Generally excludes customer details and details of quantity of goods or services. Simple receipt if below ZAR 50
Self-billing Yes. Requires approval by supplier and SARS tax office
Retention of invoices Five years in South Africa (approval to store outside country may be sought from SARS)
FX rules Invoice must be in ZAR unless export supply
Invoice corrections Via credit or debit note with all details of original invoice and clearly market "Credit Note" and amount of VAT changed, reference to original invoice number, with explanation
Compliance Right to deduct Excluded: entertainment; sporting fees or membership; motor vehicles purchase or hire
Call-off stock No provision for call-off stock VAT registration avoidance. Supply deemed to have taken place even if no legal transfer
Reverse Charge - B2B VAT for imported services are the responsibility of the customer via reverse charge. Exception for digital services which requires VAT registration by non-resident if above threshold
Cash discounts Any discount taken up should be reported through the VAT return
Bad debt relief Available where the invoice is written off through the accounting records
Import VAT deferment Yes. Import VAT due at clearance of goods into SA. But regular importers may apply for 30 day postponement if provide bank guarantee
VAT warehouse Customs bonded warehouses available with zero-rating for residents and exemption for non-residents (unless approval sort).
Supply & install N/a
Use and enjoyment services N/a
Capital goods adjustment period Deduction on payment
Non-residents VAT recovery Not permitted for services; some limited recovery for goods exported within 90 days of purchase and exceed ZAR 250
VAT on Digital Services Non-resident providers of electronic or digital services should charge VAT if above the VAT registration threshold
Live events Non-resident providers should charge VAT if above the VAT registration threshold
Distance selling threshold for goods N/a
Cash accounting scheme Yes if annual sales below ZAR 50,000 this year or previously
VAT registered cash tills n/a
Statute of limitations Three years
VAT Returns Frequency Monthly if above ZAR 30m annual turnover; Bi-monthly for most other traders
Filing method eFiling, but not mandatory
Deadlines (inc payments) 25th of the month following the reporting period - or day(s) before if weekend or national holiday. Payments remitted at same time.
VAT credits Refunded within 21 days of return being submitted or interest becomes liable from SARS
Corrections Corrective return
Non-residents Same as resident taxpayers
Other filings Voluntary submissions of supporting data to transactions to avoid queries or audits. No other supplementary filings
Penalties & interest 10% of late VAT payments or returns. Monthly interest then due for continued non payment. Further fines for misstatement or fraud
B2C Distance Selling returns N/a


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