What is value-added tax and how much does it cost in South Africa?

VAT (known as GST in some countries) is a tax levied on sales of goods and services within the EU Member States. The current standard rate of VAT is 15%. The decreased VAT rates are zero percent.

At vatcalculatorg.com you may find details on how to register, calculate, pay, and reclaim VAT in South Africa, as well as VAT rates and VAT on property regulations for VAT-registered firms.

How to compute VAT using mathematics or Excel

Following these few procedures will allow you to compute backwards or forwards VAT.

Increasing VAT formula

Divide the price by 100, then multiply by (100 + VAT rate) to add VAT to the price. So far, you have the price inclusive of VAT – gross price.

Removing VAT formula

To deduct the VAT from the price, divide the price by (100 + the VAT rate) and then multiply by 100. Now you know the price excluding VAT – Net pricing.

What is the function of a VAT Calculator?

A VAT Calculator is the most efficient way to calculate your VAT because it is quick, accurate, and straightforward.

Forget the complicated formulas for calculating and deducting VAT. That’s what the calculator’s for.

You don’t even need to consider the VAT rate, as the calculator’s methodology already includes South Africa’s 15% VAT rate. Simply enter your quantities into the slots, and the FreshBooks VAT calculator will provide you with instantaneous results. Without the VAT calculator, you must manually perform these computations.

How much is South African VAT?

Currently, the South African Revenue Service (SARS) has established two VAT rates: the standard rate and the zero rate. There are also a tiny number of items and services that are exempt from VAT altogether, such educational services.

The zero rate applies to a limited number of commodities, such as essential groceries and fuel subject to the fuel levy. You are not required to charge your clients VAT, but you are required to declare your sales as zero rated for VAT.

The current standard rate of VAT in South Africa is from 15% to 23%, and it applies to the vast majority of goods and services. As soon as your business makes R1 million yearly turnover, you must register with SARS and make sure you comply with all the VAT requirements.

Normal Rate of 23%:

Applies to the majority of SA goods and services

Rate reduction of 13.5%:

Applies to specific items and circumstances, such as household fuel.

Second 9% Reduced Rate:

Applies to the majority of SA goods and services

4.8% Livestock Rate:

Applies to specific items and circumstances, such as household fuel.

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