Value-added tax (VAT) was introduced in South Africa on the 29th of September 1991 to replace GST (General Sales Tax) as an indirect system of taxation.
It is an indirect tax on the consumption of goods and services in the economy. The current standard rate of VAT in South Africa is 15%.
A person with an annual turnover or taxable supplies that exceeds (or is expected to exceed) R1 million in a 12-month period, should be registered for VAT.
A person generating a turnover or taxable supplies exceeding R50 000, within a 12-month period, may voluntarily register for VAT.
Exports, certain foodstuffs and other supplies are zero-rated, and certain supplies are exempt (mainly certain financial services, residential accommodation and public transport).
A person is a defined term and includes a company, individual, partnership, trust fund, and a municipality.