The basic principle of Vat is that goods supplied by a vendor are generally subject to Vat at the standard rate of 14%.

But the Vat Act allows a Vat vendor to supply certain goods at the zero-rate.

These goods include:

1. Goods that are exported
2. The sale of an enterprise (or part thereof) as a going concern
3. The supply of gold to the SA Reserve Bank, South African Mint and registered banks
4. The supply of goods for farming purposes
5. Petrol or distillate fuel oil subject to the fuel levy
6. The supply of goods to a branch or main business in an export country
7. Certain specified foodstuffs
8. The supply of gold coins by the South African Mint (but not those set into jewellery)
9. The supply of illuminating kerosene
10. Supplies to Industrial Development Zones
11. Conversion of old order mineral rights
12. Renewal of mineral rights
13. Foreign donor funded projects (where supplies are made to the foreign donor)
14. The disposal of an enterprise (or part thereof) as a going concern, between separately registered vendors who fall within the same legal entity
15. Supply of goods by a non-resident to a vendor where that vendor delivers the goods in South Africa
16. Compensation received from a public authority to supply a controlled animal or thing;.

There's a pile of documents you have to keep

But for each of these goods, you must collect specific documentation, to prove to SARS why you zero-rated the supply of these goods. In fact, without these documents, SARS might find you guilty of evading tax!

The list of documents varies from one supply to the next! And seeing as SARS has just updated the rules around this, you better get your ducks in a row.

With the Practical Vat Loose Leaf, you'll know exactly which supporting documents SARS is going to look for when it checks up on your business! Avoid penalties and costly Vat audits, with the Practical Vat Loose Leafby your side.

Try our complete Vat Advisory Service risk-free for 14-days. As part of this service you'll receive the Practical Vat Loose Leaf, three Bonus Reports, Regular updates, the dailyTax Bulletin, Online access to past Vat Updates and access to the Vat Helpdesk.

What else you’ll discover in the Practical Vat Loose Leaf, to help you take control of your Vat:

Checklists, to save you time and ensure you don't miss a thing!

• zero-rated foods
• 5 exceptions to the basic fringe benefits rule
• 6 vehicles that SARS opens the doors to
• Documents to attach to your VAT101 application
• 6 basic rules about travel and Vat

 
Vat advice you can put into practice today:

• 4 important documents to keep for export between branches
• Don't charge Vat on these 14 zero-rated foodstuffs!
• 3 records for intergroup sales, and zero-rating
• How to complete your Vat return
• 4 important documents to keep for export between branches