What To Do When You Need a VAT Refund

What To Do When You Need a VAT Refund

Throughout the years, we’ve worked extensively with business owners who have explained to us, the struggles they have with the different moving parts in their finances and when it applies to VAT and SARS. We know some things just. don’t. balance. This is amplified even further where finances are concerned, like when you need a refund.

SARS and VAT refunds

The process of getting a VAT refund does not have to be difficult. Like many things in the business world, finances are much more manageable when admin is sorted.

In this case, you would simply ensure that you have the information that SARS would request from you. For example, they could ask if you are registered for VAT. While this may seem obvious to some, some business owners believe VAT applications happen automatically once a business is registered. Before they used our secretarial services, they believed this was true.

Other examples, of things SARS might request, are to ensure that you have provided the correct banking details, submitted all your VAT returns, and paid other taxes administered by SARS. Registration is easy and this simple process is explained in depth in our blog, how to make your business payments correctly.

How and when to claim

VAT, value-added tax, is defined as “indirect tax on the consumption of goods and services in the economy. Revenue is raised for government by requiring certain businesses to register and to charge VAT on the taxable supplies of goods and services” according to SARS.

Once registration and admin is complete, ensure you understand when you can claim. This is the VAT paid on the inputs and expenses that were incurred in earning profit from the items or services where VAT is charged. VAT returns can be processed online through SARS e-filing or the closest SARS branch in your area

If you’re a vendor, you are required to claim a VAT refund and submit VAT returns in accordance with the allocated tax period. You will submit a VAT 201 declaration at the end of every tax period.  VAT returns need to be completed every two months in order to prove that input VAT has been incurred collected. After the 25th day, VAT must be paid in alignment with the tax period.

If you don’t receive your refund within 21 business days, after successful registration and submission of your VAT 201 return, you are entitled to interest on your VAT refund at the prescribed date. Keep your paperwork professionally updated in order to hold SARS accountable.