new vat registration procedures (again)
by kgotso lebotsa

SARS introduced simplified registration procedures for VAT registration with effect from 1 February 2008, and significantly reduced the number of supporting documentation that was required for VAT registration. Previously only copies of the identity documents and confirmation of the bank account was required together with a much simplified registration form. This enabled SARS branch offices to capture the applications immediately and to issue a VAT registration number over the counter. Unfortunately not all SARS branch offices were initially made aware of the new registration procedures, and some of them refused to process the applications immediately. Most of these teething problems have now been addressed.

However, SARS has again revised the registration process from 1 April 2008, and unfortunately expanded on the information and documentation required to register. In addition to copies of the identity documents of the responsible persons and the bank letter confirming the bank details, SARS now also requires the certificate of incorporation if the vendor is a company, close corporation or a trust, or the constitution in the case of a club or welfare organisation. Substantiating evidence of the vendor’s turnover must also be provided in the form of either the last three months’ bank statements, or the source of the financial information that is used to determine the value of taxable supplies, if the bank statements are not available.

SARS does not process all VAT registrations immediately, but only those that are presented personally to a SARS official at the branch office, which means that you have to get in a queue and wait your turn. If the application form is merely deposited into the SARS letterbox, then it is sent to a central processing centre where the registration form can take up to a month to be processed.

Hopefully one would some day be able to register for VAT on-line, or at least be able to lodge the applications forms and supporting documents on-line, and still be able to obtain a VAT registration number immediately.

Finance Minister Trevor Manuel announced in his 2008 Budget Review in February that the VAT threshold will be increased from R300 000 to R1 million. However, this did not happen and SARS recently issued a media release to advise that their intention is that the increase in the VAT registration threshold should only coincide with the introduction of the simplified presumptive turnover tax for very small businesses in 2009.

In the meantime, new businesses with an annual taxable turnover of more than R300 000 are obliged to register for VAT, and existing businesses with a taxable turnover of less than R1 million but more than R300 000 should remain VAT registered.

SARS further announced that the draft legislation with regard to the presumptive tax will be published later this year for comment.

kgotso lebotsa – senior associate

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