How to File VAT Returns in South Africa: Complete Guide

Filing VAT returns accurately and on time is a critical responsibility for all VAT-registered businesses in South Africa. This comprehensive guide walks you through the entire process of preparing and submitting VAT returns to the South African Revenue Service (SARS), including deadlines, required information, and tips for avoiding common mistakes.

Understanding VAT Return Periods

VAT returns in South Africa are filed based on your registration category. Understanding your filing period is the first step to staying compliant.

Category A: Monthly Returns

Businesses with taxable supplies exceeding R30 million per year are classified as Category A vendors and must submit VAT returns monthly. The return period runs from the first to the last day of each calendar month.

Category B: Bi-Monthly Returns

Most VAT vendors fall into Category B and file returns every two months. The tax periods are:

• Period 1: January - February
• Period 2: March - April
• Period 3: May - June
• Period 4: July - August
• Period 5: September - October
• Period 6: November - December

VAT Return Submission Deadlines

Meeting submission deadlines is crucial to avoid penalties and interest charges. The deadlines differ based on your submission method.

eFiling Deadlines

If you submit your VAT return through SARS eFiling, the deadline is the last business day of the month following the end of your tax period. For example, a Category B vendor for the January-February period would have until the last business day of March to submit their return.

Manual Submission Deadlines

For manual submissions at a SARS branch (where still permitted), the deadline is the 25th of the month following the end of your tax period.

Information Required for VAT Returns

To complete your VAT return accurately, you need to gather specific information from your accounting records.

Output Tax Information

You need to report the total value of all supplies made during the tax period, categorized by rate:

• Standard-rated supplies (15%)
• Zero-rated supplies (0%)
• Exempt supplies
• Capital goods
• Adjustments to output tax

Input Tax Information

You also need to report input tax claimed on business purchases:

• Capital goods purchased
• Other goods and services purchased
• Imports
• Adjustments to input tax

Step-by-Step Guide to Filing via eFiling

SARS eFiling is the most convenient and recommended method for filing VAT returns. Here is how to complete the process:

Step 1: Log into SARS eFiling

Access the SARS eFiling portal using your login credentials. If you do not have an eFiling profile, you will need to register first using your personal details and ID number.

Step 2: Navigate to VAT Returns

Once logged in, navigate to the Returns section and select VAT. If a return is due, you will see the VAT201 form available for completion.

Step 3: Complete the VAT201 Form

Enter all the required information from your accounting records. The form includes fields for output tax, input tax, and any adjustments. Double-check all figures before proceeding.

Step 4: Review and Submit

Review your completed return for accuracy. The system will calculate the net VAT payable or refundable. Once satisfied, submit the return electronically.

Step 5: Make Payment or Claim Refund

If you owe VAT, make payment through eFiling before the deadline. If you are due a refund, SARS will process this after verifying your return.

Common Mistakes to Avoid When Filing VAT Returns

Avoiding common errors can save you from penalties, interest, and audits. Here are the most frequent mistakes:

Incorrect Categorization of Supplies

Ensure you correctly classify supplies as standard-rated, zero-rated, or exempt. Misclassification can lead to under- or over-reporting of VAT.

Claiming Input Tax Without Valid Invoices

You can only claim input tax if you have a valid tax invoice. Ensure all invoices contain the required information before claiming the input tax.

Missing Deadlines

Late submission attracts penalties and interest. Set reminders well in advance of your filing deadlines.

Penalties for Late or Incorrect VAT Returns

SARS imposes various penalties for non-compliance with VAT return requirements:

• Late payment penalty: 10% of the amount unpaid
• Late submission penalty: Fixed amount based on the vendor category
• Interest: Charged on outstanding amounts at the prescribed rate
• Additional penalties for understatement or fraud

Conclusion

Filing VAT returns correctly and on time is essential for VAT-registered businesses in South Africa. By understanding your filing period, gathering accurate information, and using SARS eFiling, you can streamline the process and avoid costly penalties.

For accurate VAT calculations throughout your tax period, use our free VAT calculator to ensure your records are precise when it comes time to file your return.