How can I avoid paying VAT in South Africa?

How can I legally pay less VAT?

10 ways to pay less VAT

  1. 1 Choose the best VAT Scheme for your business.
  2. 2 Claim Pre-registration VAT. …
  3. 3 Property Investors might benefit from a Development Company. …
  4. 4 Do you need to charge VAT on Intercompany Charges. …
  5. 5 Use VAT Groups for Business Acquisition Costs. …
  6. 6 How Hotels save VAT. …
  7. 7 VAT on Pool Cars. …
  8. 8 Use a Tronc for Tips.


How can I avoid VAT in South Africa?

To reduce VAT costs, items would need to either fall under the exempt categories, or deduct tax that has been paid during previous stages. You will not have to register for VAT unless you make taxable sales that exceed R1 million over 12 consecutive months. This means that smaller businesses may be exempt from VAT.

How can I pay less tax in South Africa?

10 Tips to Pay Less Tax

  1. Contribute towards a retirement fund. …
  2. Open up a Tax Free Savings Account. …
  3. Donate to a SARS registered charity. …
  4. Join a Medical Aid Scheme. …
  5. Keep a logbook if you receive a travel allowance. …
  6. Keep a logbook if you drive a company car. …
  7. Claim commission related expense if you are a commission earner.
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How do I avoid VAT threshold?

If you happen to offer a variety of products or services which are distinctly different, you may be able to avoid passing the VAT threshold by chopping up your business into smaller businesses that handle one product or service each. Your annual revenue is now split up between these separate businesses.

Who is exempt from paying VAT?

If a business only supplies goods or services that are exempt from VAT, it is also considered to be exempt from VAT. If a business is VAT-exempt, it cannot be registered for VAT. Like other businesses that are not registered for VAT, VAT-exempt companies: Cannot charge VAT on any sales they make.

How much can you earn before paying VAT?

You must register for VAT if your VAT taxable turnover goes over £85,000 (the ‘threshold’), or you know that it will. Your VAT taxable turnover is the total of everything sold that is not VAT exempt. You can also register voluntarily.

What is the VAT in South Africa?

VAT is now levied at the standard rate of 15% on the supply of goods and services by registered vendors.

Who must pay VAT in South Africa?

All businesses that have a 12 month period turnover that exceeds R1 million are obligated to pay register and pay over VAT to SARS. Businesses with a turnover below R1 million but greater than R50 000 for a 12 month period may register voluntarily.

How far back can you claim VAT in South Africa?

One should not automatically assume that value-added tax (VAT) refunds may always be claimed within five years of the end of a relevant tax period. Refunds to vendors are governed by section 44 of the Value-Added Tax Act No. 89 of 1991 (the Act).

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How much do you need to earn to pay tax in South Africa 2020?

For the 2020/21 tax year, if you are younger than 65 years of age and your annual taxable income (gross income minus deductions) is below the threshold of R83 100, you do not pay tax. If you are 65 or older, the tax threshold is R128 650, and if you are 75 or older, the threshold is R143 850.

At what salary do I pay tax in South Africa?

24 February 2021 – Tax Rates changes

R87 300 if you are younger than 65 years. If you are 65 years of age to below 75 years, the tax threshold (i.e. the amount above which income tax becomes payable) increases to R135 150. For taxpayers aged 75 years and older, this threshold is R151 100.

Where should I put money to avoid taxes?

  1. Invest in Municipal Bonds.
  2. Take Long-Term Capital Gains.
  3. Start a Business.
  4. Max Out Retirement Accounts and Employee Benefits.
  5. Use an HSA.
  6. Claim Tax Credits.
  7. The Bottom Line.

Is it better to be VAT registered or not?

Clearly, if your business falls above the VAT threshold then registering for VAT is vital to stay within the law. However, VAT isn’t just a matter for bigger businesses and it’s definitely worth weighing up the pros and cons of this. … You can reclaim any VAT that you are charged when you pay for goods and services.

What is the VAT threshold for 2020?

For the 2020/21 tax year, the VAT registration threshold is set at £85,000, but can change each year. It’s calculated on a rolling basis, so you’ll need to monitor your taxable turnover for a rolling 12 month period, not just in the current tax year, your last financial year or the calendar year.

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Is being VAT registered good or bad?

Why might it be bad to register for VAT? If your customers are mainly consumers and other small non-VAT registered businesses, then being VAT registered can be a disadvantage. It means that your prices will be 20% more expensive than your non-VAT registered competitors.

Hai Afrika!