VAT Rates in South Africa
As a critical component of the South African tax system, Value Added Tax (VAT) impacts both businesses and consumers, making it vital to stay informed of its workings and current rates.
This page offers a comprehensive overview of the VAT rates, and the categories of goods and services affected. South Africa has a standard VAT rate, which is periodically adjusted by the government, alongside zero-rated and exempt items that are crucial for both compliance and financial planning.
VAT Rates in South Africa
Standard VAT rate |
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| The standard VAT rate is the primary rate of VAT applied to goods and services within a country, covering most items except for certain specific goods and services that may qualify for a reduced rate. Some exceptions include essential items or goods and services that meet certain criteria. The standard VAT rate in South Africa is 15% with no supplementary rates applied. | |||
Reduced VAT ratesThere are no reduced VAT rates under the South African VAT regime
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Exempt products or services(Exempt supplies are those on which no VAT is charged, and no VAT deduction is allowed for associated input costs. In contrast, zero-rated supplies, while also not incurring VAT, do permit suppliers to claim deductions for input VAT, distinguishing them from exempt supplies.)
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| • Educational services, such as those provided by universities and schools; • Residential accommodation in a dwelling; • Financial services, which include currency exchange, long-term (life) insurance, debt securities, equity securities, derivatives, and credit granting; • Childcare services provided by daycare centers or after-school care facilities; • Passenger transportation services via road or rail (except funicular railways), when these services are not subject to the zero VAT rate. |
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Zero-rated Supplies |
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| • Basic food items such as brown bread, maize meal, beans, lentils, rice, milk, and raw, untreated fruits and vegetables, unless preserved in their natural state. • International transport services: The VAT treatment of supplies of international and ancillary transport services. • Sanitary towels. • Exports. • Goods and services utilized exclusively in an export country under a rental or charter agreement. • Services provided directly related to movable property located in an export country at the time the services are performed. • Certain services offered to nonresidents who are not in South Africa when the services are rendered, unless these services are related to fixed property or movable goods in South Africa. However, this excludes situations where the movable property is exported later, or the services are part of the supply of movable property by the nonresident to a registered vendor in South Africa. • Municipal rates imposed by a municipality. • Goods subject to the fuel levy, such as diesel, petrol, and illumination kerosene. • Supplies from an inbound duty and tax-free shop. • Welfare services conducted by a welfare organization considered to be supplied to a public authority or municipality, as outlined in Section 4.5. • The transfer of an enterprise between vendors as a going concern. • Certain insurance related to international transportation services and cross-border transactions. • International roaming services provided by telecommunications service providers, registered under South African electronic communications legislation, to nonresident telecommunications providers. |
There are more aspects to South Africa’s VAT rates and system that require a deeper analysis and understading. If you wish to get informed on how these rates affect your international business please send us an email or schedule a call with one of our experts.
If you wish to get quickly informed about all basic and reduced VAT rates in Europe or VAT rates in the World you can view our dedicated page by clicking on the respective title.
Last Updated: 08/05/2024
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax