Value-added tax (VAT) is an indirect consumption tax levied on most goods and services sold in South Africa. It is also charged on imports. Business operators that have reached a VAT threshold must register for VAT. Like other forms of tax, registered vendors can claim VAT, and foreign visitors are also eligible to do the same. Not everyone is entitled to claim a VAT refund since certain conditions must be fulfilled first. Read on to learn how to claim back
How to Claim Back VAT in South Africa
If you are a registered VAT vendor, you can claim a refund if you mistakenly pay more than what is required. Furthermore, you will be entitled to get a VAT refund if your input VAT is more than the output VAT. Under normal circumstances, VAT is only payable to SARS when output VAT exceeds input VAT.
Vendors can claim a VAT refund by booking an appointment with a SARS official, where they can submit their application. They can also file a claim via the eFiling platform. A VAT refund should be processed within 21 business days. If SARS fails to process the refund within the stipulated time, the vendor will get the money together with interest.
Foreign visitors, including diplomats, tourists, and non-residents, can claim VAT on the products they intend to take out of the country. To be eligible to claim a VAT refund, you must purchase tangible products with a total value exceeding R250.
Visitors must submit their application for VAT at the VAT refund Administrator’s (VRA) offices at designated international airports, commercial harbors, and land borders. When you buy items you want to take out of the country, you need to request an invoice from the shop assistants. You can do this by producing your passport showing that you are a visitor. Your invoice must have the following information:
- VAT charged
- Description of the items purchased
- Purchaser’s name and address
- Unique tax number
You must physically declare the goods for export at the port of departure and present the original documents to the customs official. If there is no VRA official, you can claim your VAT refund by writing to the right office. However, you should do this before the day of departure.
On What Items Can You Claim VAT in South Africa?
If you are a foreign visitor to South Africa, you can claim VAT on movable goods acquired from VAT-registered vendors. VAT refund only applies to unused goods, so they must be sealed when you declare them at the point of departure. You cannot claim a VAT refund for any services rendered in the country.
In the case of registered vendors, VAT refunds are inclusive and apply to taxable supplies only. When you operate a business, you should know that the following items are zero-rated, meaning that no VAT is charged.
- 19 basic foods like milk, bread, and others
- Paraffin, kerosene, and diesel
- Certain government grants
- Transport services
- Property sale
If you intend to claim VAT in South Africa, you should know the conditions to fulfill first.
How Do I Claim My VAT Refund Online?
You cannot claim VAT online, especially if you are a foreign visitor. When you qualify for VAT, you must physically present yourself together with your goods to the customs official at the designated port of departure. Your tax invoice should be endorsed by the VRA official before the refund is approved.
You can also claim a VAT refund by writing a letter to the appropriate office. Your letter must be accompanied by the following documents:
- Original tax invoice
- Copy of valid passport showing dates of entry into South Africa
- Copy of the purchaser’s trading license
- A letter from the diplomatic mission authorizing the purchase
When you choose this option, you should make sure you submit your application before your departure day.
How Do I Know SARS Will Refund Me?
If you are a foreign visitor, you know that SARS will refund you when you meet the following requirements:
- You are a qualifying purchaser as outlined by the Export regulation
- All the items must be exported within 90 days of obtaining the tax invoice
- The goods you intend to export must have a minimum value of R250
- The request for VAT must be accompanied by appropriate documentation
- You export the goods through one of the 43 designated ports of departure
If you are a registered vendor, you must provide correct information to ensure that your application for a VAT refund is approved. You should not have outstanding returns, or your account has been selected for verification.
How Long Does SARS VAT Refund Take?
For foreign visitors, a VAT refund is processed on the day you submit your application. A customs official will assess your application and process a refund before you leave the country. However, this can only be possible if you meet all the requirements.
VAT refunds for registered vendors are paid within 21 days if the applicants provide all the relevant supporting materials. If SARS requests additional details, it means you will not get a refund within the stipulated 21 days. If you don’t get your refund within 21 days, SARS must pay interest on the outstanding amount.
There are exceptions when SARS can decide to withhold or suspend the issuance of a VAT refund to a vendor within 21 days. A refund is withheld under the following circumstances:
- The vendor needs to correct certain sections of the application
- Wrong banking details were provided
- The vendor has outstanding VAT returns
- A verification or audit is underway
- SARS is convinced that another vendor will pay the refund
If you are selected for verification, you must provide the necessary documents to facilitate the processing of your refund. If your claim for refund is a result of overpayment, you should submit the application within 90 days. Remember that your refund may be used to offset your outstanding debt.
Registered vendors and foreign visitors can claim VAT if they meet the requirements stipulated by SARS. It is important to provide the correct details to facilitate the payment of your refund. However, SARS can withhold your VAT refund due to different reasons.
How To Calculate Customs VAT And Duties
We are looking into VAT and duty more closely, with some important information you should be aware of if you are importing and exporting goods
How To Check A Company’s VAT Number
Luckily, there are ways for you to check if a company's VAT number is legitimate with SARS. Here is what you need to know.
How To Add VAT to A Price In South Africa
Today, we are diving deeper into the mathematical side of VAT, including how to add and subtract VAT from amounts
How To Check The Validity Of A VAT Number
How do you check the validity of a VAT number? Today we look at convenient ways to do so, as well as some other important issues you should consider.
Can You Charge VAT Without a VAT Number?
This article examines whether you can levy VAT without a VAT number, the process for issuing VAT invoice
Difference Between VAT and TAX?
What Is the Difference Between VAT and Tax in South Africa? This guide explains the difference between VAT and tax.
How To Apply For Monthly VAT Returns
You do not apply for a specific VAT return period in South Africa. Instead, you will simply apply to SARS to be registered as a VAT vendor
How to Deduct VAT From an Amount in South Africa?
How to Deduct VAT From an Amount in South Africa? This article explains everything you want to know about calculating VAT.
What Is The Difference Between Exempt And Zero-Rated for VAT?
It is critically important to understand what each of these two distinctly separate categories means, and how it will impact your business if you operate with either.
How Much is the VAT Rate in South Africa?
This guide offers comprehensive insights into the VAT rate, the calculation process, exempt items, and the minimum income threshold for tax payment
Can You Claim VAT On Accommodation In South Africa
This comprehensive guide will delve into the VAT nuances related to accommodations, such as whether VAT applies to stays surpassing 28 days
How to Claim Back VAT on Property Purchase
This guide explains everything you want to know about claiming back VAT on property purchases.
How Much Must You Earn to Pay VAT in South Africa?
This guide explores the income thresholds for individuals and businesses that trigger VAT obligations