VAT Verification Requests

VAT verification requests have become a hindrance to business for many taxpayers. Assessments are being raised through
VAT217’s and which in turn negatively impacts cashflow and tax compliance status, let alone productive time spent in dealing with SARS to resolve these issues.

Being adept in both the legal and practical issues associated with VAT, our solution to the problem is threefold:

  • We train you/your staff on what exactly it is SARS is trying to achieve and what you as taxpayer are being called
    upon to do;
  • We assist by helping you implement a system to prepare a response to SARS’ request that has the best possible
    chance of preventing a liability from arising in consequence of the verification; and
  • We assist with any dispute arising between you and SARS should a liability nevertheless arise through the raising of a
    VAT assessment and dealing with the adverse tax compliance position you may find yourself in

Our aim is to provide you with a sustainable solution to deal with SARS in an effective constructive manner so that you can
focus on business. We are very flexible in the way we engage, we can therefore tailor this solution to accommodate your needs.

01. VAT – Apportionment

Taxpayers making both taxable and exempt supplies are required to apportion their input tax credits (subject to the deminimums rule). The only SARS approved standard apportionment method is the turnover method. Whilst there are various other methods (“adjusted turnover methods”) that may yield more favorable results for a specific taxpayer (such the transaction processed method), they may only be relied upon if SARS’ approval is contained beforehand.Contact us for assistance with getting SARS’ approval for alternative apportionment method.

02. VAT – Zero Rated Sales

Certain supplies qualify to be zero rated for VAT purposes (such as direct exports, for example). The zero rate is very beneficial as it allows the taxpayer to claim input tax credits without having to pay VAT to SARS. Given this favorable treatment which often results in a VAT refund, there are very strict, often complex rules associated with when a taxpayer may rely on the zero rate and these are strictly enforced
and checked by SARS. Incorrectly relying on the zero rate may give rise to hefty penalties as high as 200%
of the tax not charged correctly. We have deep technical understanding of the law associated
with zero rated supplies. Contact us to make sure your transaction qualifies to be zero rated.

03. VAT – Foreigners

Foreign businesses/companies operating in South Africa may be liable for VAT registration and VAT compliance in South Africa. South African VAT rules, unlike the income tax rules, do not require the existence of a permanent establishment in South Africa before a liability is triggered. Any South African activity, may trigger a South African VAT liability. Contact us for guidance on your liability or otherwise for South African VAT.

04. VAT – Going concern

Selling a business or part of a business as a going concern may qualify for the zero rate. However, too often we see sales being treated as a going concern when it does not satisfy the requirements for the zero rate. Whilst sellers are normally sufficiently covered for the VAT in the sale agreement in the event that SARS requires VAT to be charged at the standard rate, the sale agreement does not cover the seller against the ensuing penalties and interest which can be as high as 200% of the tax not paid. Contact us to make sure that when you are relying on the zero rate on the sale of a business that you are doing so correctly. The liability for the VAT ultimately remains the seller’s responsibility.

Our Services

We Provide Highly
Reliable & Effective Tax Solutions

For the right solution to your tax concerns, you need tax professionals with the skill, integrity and experience to deliver.