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Here’s what you need to know about VAT before you apply.
It is mandatory for a business to register for VAT if the total value of taxable supplies made in any consecutive twelve month period exceeded or is likely to exceed R1 million. The business must complete a VAT 101 – Application for Registration form and submit it to the local SARS branch within 21 days from date of exceeding R1 million.
A business may also choose to register voluntarily for VAT if the value of taxable supplies made or to be made is less than R1 million, but has exceeded R50 000 in the past period of 12 months.
- Company registration documents
- Copies of the director’s identity document (Certified)
- Invoices issued to clients by you exceeding R50 000 in total if the business has been registered for more than 12 Month
- Invoices issued to clients the at least exceed R4600 if the business is newly registered and is not older than 3 months.
- Bank statements for the past three months preferably showing payment of the above invoices
- Director’s proof of residence
- Company’s proof of business address
Value Added Tax or VAT is essential whenever the business is involved in the activity of selling the goods. Not all the companies must do a VAT registration. The VAT rates vary for different states, and only those having an annual turnover of more than five lakhs is a must for VAT registration.
The main purpose of VAT registration or filling a return is to show the summary of the value added tax to the authorities. It also stands as evidence that the VAT obligations are thoroughly followed by the company. In addition to that, the authorities have also made it a mandate to register for VAT and then file VAT returns or else some penalties are applied.
Documents required for VAT registration are mentioned below:
- Address Proof
- Identity Proof
- Passport Size Photograph
- Sales Deed
- Rent agreement
- Lease Deed
- Conveyance Deed
- Company PAN Card
- Board Resolution
- Partnership Agreement or Certificate of Incorporation
- MoA and AoA
VAT registration is beneficial to your business, being a registered dealer you get the advantage of inputting the VAT credit. The dealer doesn’t gain any loss or profit from VAT what it obtains from the customer, but it goes to the government.
To know more about VAT, you can visit our official website.