Value-added tax (VAT) refers to indirect tax levied on the consumption of different services and goods in the country. Certain businesses are required by the government to register for VAT since it is one of the major sources of revenue. Register businesses are known as vendors, and they collect VAT on behalf of the government. This guide explains everything you need to know about VAT registration.
What Is a VAT 101 Form?
It is mandatory for a business that has reached a turnover threshold of R1 million or more in 12 consecutive months to register for VAT. Business operators must complete a VAT 101 form, which is the application for registration form. You should complete this form within 21 days from the date your business reaches R1 million turnover. Once you complete the form, you must submit it to your local SARS branch.
How to Complete a VAT 101 Form?
You need to first download the VAT 101 form from the SARS website and print it. Using a blue or black pen, complete all the relevant sections. Before you start filling out the form, you should gather all the necessary financial information concerning your business. SARS Power of Attorney must accompany the VAT application if a registered tax attorney handles the registration on behalf of another business.
You should start filling out the VAT 101 form by entering your business details, such as trading name, legal name, and contact information. Complete all the sections about your business activities that can include industry and turnover.
The main parts of the form that must be completed by the applicant include the following:
- Applicant details: Individuals, company, partnership, trust, and other entities
- Particulars of members, partners, beneficiaries, trustees, directors, etc
- Particulars of representative taxpayer
- My addresses
- My bank accounts
- VAT
- VAT- Diesel refund concession options
- VAT- diesel refund
- Tax practitioner details
- Declaration
When filling the blocks on the form, use this checklist to avoid mistakes.
- Use capital letters
- Use an X in the container where an election is required
- Leave the container blank if it is not applicable (Don’t write N/A)
- The date format should be year, month, date (YY/MM/DD)
- Alterations must be authorized by the applicant or representative taxpayer
- Disclose that the information you’ve provided is accurate
False information, misrepresentation, or negligence can lead to prosecution. Take your time to complete the form, and make sure you only use true and verifiable information. The applicant or authorised representative must sign the declaration. However, a tax-registered practitioner may not sign the form on behalf of someone. Remember, any form that is not signed is automatically rejected.
Once you complete the VAT 101 form, you should hand it in person at your local SARS branch where your business is located. The processing time of the application depends on the accuracy of the documents you submit and the volume of applications being processed at a certain period. You’ll get a Notice of Registration once your application is successful. SARS employees are prohibited from verbally communicating VAT registration numbers to clients.
Applicants can also check the status of their applications by visiting the SARS website at www.sars.gov.za and typing “VAT Vendor Search.” Your details will be displayed on the screen.
What Supporting Documents Are Needed for VAT Registration?
The applicant must submit the following supporting documents when they complete their VAT registration application.
- Copy of original Identity Document
- Taxpayer registered information
- Proof of business address
- Copy of trust deed
- Certificate of incorporation (Proof of business being registered for intellectual property)
- Three months bank statements showing business transactions (Bank account must be free from personal transactions). Alternatively, you can submit an original letter confirming your account from your banker.
- Latest invoice showing your business transactions
Your application must have copies of original documents, but they do not need to be certified. Photocopied or faxed applications are not accepted for security reasons as well as to prevent fraudulent activities. SARS can only accept an application sent by post if you can prove that you are far from SARS branches in your area; a disability might prevent one from presenting it in person.
If certain documents are missing, there might be delays in processing your VAT registration. When the registration is successful, you will get a unique VAT vendor number that should appear on receipts, quotations, invoices, or any correspondence you get from SARS. You can use different payment methods, such as debit orders, direct transactions at SARS branches, the eFiling platform, or bank transfers to settle your VAT payments.
What Is a VAT 103 Document?
A VAT 103 document is a registration certificate confirming the success of VAT registration. VAT number is only issued after validation and verification of the application. Nowadays, applicants get a VAT Notice of Registration when their applications are successful. If additional details are required, SARS will inform the applicant.
What Is a VAT 404 Document?
A VAT 404 document is a simplified guide for vendors that does not use legal and technical terms to help vendors understand their obligations. The technical jargon often used in the tax-related field can be confusing since it is difficult to understand. Therefore, this comprehensive guide does not address all the legal details related to VAT. Additionally, the document cannot be used as a legal reference. Instead, you can use it to gain insight into different issues concerning VAT you may be interested in knowing.
When your business reaches a turnover threshold of R1 million in 12 months, you should register for VAT with the South Africa Revenue Service. To do this, you need to download a VAT 101 form from the SARS website. Print the form and fill in all the relevant sections using blue or black ink. Your application must be accompanied by the right documents, and it should be signed. Upon successful registration, you will get a unique VAT vendor number, which appears on receipts, invoices, or any other business-related communications.
