News

News Topics


VAT registrations – What is all the fuss about? – Part 4 (final)

Posted by: Ibay | Posted on: September 26th, 2016 | 0 Comments

Documentation

The supporting documentation that is to be supplied along with the application varies dependent on the nature of the person registering for VAT. These are no longer detailed on the face of the VAT application but are addressed and further explained in SARS’ guide to the completion of VAT applications. A summary of the documentation that currently needs to accompany your application are as follows, but are not limited to the following items:

  • Copies of identification documents for sole proprietors or partnerships.
  • Statutory documents for companies/cc’s along with ID copies of all directors/members.
  • Trust deed and letters of authority for a trust along with ID copies of all trustees.
  • Proof of banking details – either:
    • Original letter stamped by the bank not older than one month from application confirming the business banking particulars, or
    • Original stamped bank statement not older than three months from application confirming the banking particulars
  • Copy of financial information upon which the entity is registering – this will vary dependent on whether registering compulsory or voluntarily. If compulsory, proof that turnover has exceeded R1 million in the 12-month period prior to registration (e.g. copies of invoices issued, signed financial statements, copies of written signed contracts, proof of taxable supplies made by seller in respect of going concern transaction). If voluntarily, proof that turnover has exceeded R50,000 (consultants generally want to see invoices to the value of R50,000 or more as well as payment of these invoices detailed on bank statements) or if registering based on a reasonable expectation that turnover will exceed R50,000 then proof as detailed in the Minister’s ruling.
  • Confirmation of business address – either a copy of a recent municipal account or a copy of the signed lease agreement detailing the address. If these are not available, a completed and signed CRA01 form (available on SARS’ website) can be used for this purpose.
  • Confirmation of residential address of representative vendor – either a copy of a recent municipal account or a copy of the signed lease agreement detailing the address. If these are not available, a completed and signed CRA01 form can be used for this purpose.
  • If the application is presented by a tax practitioner – a power of attorney signed by the representative vendor authorising the practitioner to submit the application on their behalf.  

The VAT registration process will undoubtedly continue to evolve along with more stringent reviews and audits on those vendors in the VAT system as SARS identifies areas of risk in the process. The VAT system, be it a self-assessment process, has proved to be an efficient place for the fiscus to extract tax and is second to personal income tax in contribution to the national budget. SARS will surely continue to enforce compliance on this indirect tax for this very reason and in so doing make it onerous and administrative on the legitimate business to get into the system and at the same time very difficult for those trying to defraud the system to stay in it.  

Author:  Alex de Abreu