If you are due a refund of any type from SARS, whether it is for income tax or a VAT return, you want to know that you will receive it speedily. While SARS has put several systems in place to try and make this a speedier process, there have been some notorious delays in recent years. Today we will walk you through how to check on both tax and VAT refunds in South Africa, as well as some other tips and tricks around refunds.
How Do I Check The Status Of My Tax Refund In South Africa?
Firstly, let’s be clear: a tax refund refers to an income tax refund, not a VAT refund. You receive a tax refund in South Africa after collating and finalizing your tax return for the year. VAT refunds, on the other hand, will be generated from the VAT201 return submission for a specific period (usually the 2 months before the date of the return being filed, although it varies). You do not have to wait until the end of the income tax year for these, they will be processed as submitted.
If you want to check the status of a tax refund in South Africa, there is a new system to make this more convenient. It was launched in July of 2024. You will now go to the Tax Return Status Dashboard to do this. This tool can be used by registered representatives, individuals, and tax practitioners to check on the status of a return for themselves or their clients.
How Long Does SARS Take To Process A VAT Refund?
SARS uses a basic benchmark of 21 days for all forms and refund processing. However, your VAT refund is only likely to take this long the first time you receive one, as they will check and verify your business bank account details before issuing the refund. Most VAT refunds are paid out within 72 hours of this verification being completed. However, if it takes longer than this, you can only query the matter after the 21 days have passed. Remember that no refunds will be processed if you are selected for audit or verification until SARS is satisfied that that audit/verification can be closed and is accurate. So if you receive a notice asking for proof or supporting documents, react to it timeously to expedite the process.
How Do I Know If SARS Owes Me A Refund?
When you fill in your online return, whether it is for VAT or income tax, you will see from the form calculations whether you are at a ‘nil’ balance, due a refund, or need to pay over money to SARS related to the return. It will also show the payment reference number for the transaction.
However, that doesn’t mean that SARS will immediately issue a refund. Remember that they will process and verify the information on your form with their system and relevant third parties- or fraud would be immensely easy! Most types of tax returns, including VAT returns, will generate a ‘Notice of Assessment’ if they are accepted by SARS as valid. This will also show the refund due, or the amount to be paid. Typically, you will then receive your refund within 21 days. You can also see refunds due on your statement of account for the tax type.
If your return or business is selected for verification or a full audit, it will put a temporary halt on any due refunds until SARS has received and processed all supporting documents around the period being verified/audited.
Where Do I Claim A VAT Refund In South Africa?
If you are a business looking to claim a VAT refund in South Africa, this will be handled as part of your ongoing VAT201 returns and submissions. Once all details have been accurately entered, you will see if you are due a VAT refund, or whether you need to pay over VAT to SARS. This will also be shown on your statement of account for your VAT tax type.
However, businesses aren’t the only people who can claim a VAT refund in South Africa! If you are a tourist in South Africa, you can also apply to have your VAT refunded. There are VAT Refund Offices for this purpose at all three major international airports in South Africa- OR Tambo, Cape Town International, and King Shaka Airports. You will need to take the slips to prove the VAT you have paid into the office, and they will process your VAT refund for you. Expect to have to provide them with a bank account to pay into, as the process isn’t always instantaneous.
Hopefully, you now feel much more confident about tax refunds and VAT refunds in South Africa, and how to ensure you receive yours as speedily as possible.
