How VAT works in South Africa
Value Added Tax (VAT) is charged at 15% on most goods and services in South Africa. It's collected by businesses on SARS's behalf and passed on in the final price you pay.
If you see a price marked incl. VAT, the 15% is already built in — use Extract VAT to see what the price was before VAT. If you see excl. VAT, you'll add 15% to get the total.
Some goods are zero-rated (taxed at 0% — brown bread, rice, maize meal, and other basics) and some are exempt (financial services, residential rent). If you run a business with revenue over R1 million per year, you must register for VAT.
When to use each mode
- Add VAT — when quoting a customer a VAT-inclusive price from your exclusive cost.
- Extract VAT — when working out the ex-VAT portion of a receipt or invoice.
- VAT Only — when you know the VAT amount and need to reverse-engineer the net and gross.
Frequently asked questions
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