Understanding VAT in South Africa
Value Added Tax (VAT) is an indirect tax charged on most goods and services in South Africa. The current VAT rate is 15%, which was increased from 14% on 1 April 2018. This calculator helps you quickly add or remove VAT from any amount, making it essential for businesses, freelancers, and consumers.
How to Calculate VAT
Adding VAT (VAT-Exclusive to VAT-Inclusive)
To add 15% VAT to a price, multiply by 1.15:
VAT-Inclusive Price = VAT-Exclusive Price × 1.15
Example: R100 × 1.15 = R115.00
Removing VAT (VAT-Inclusive to VAT-Exclusive)
To remove 15% VAT from a price, divide by 1.15:
VAT-Exclusive Price = VAT-Inclusive Price ÷ 1.15
Example: R115 ÷ 1.15 = R100.00
Finding the VAT Amount Only
To find just the VAT portion of a VAT-inclusive price:
VAT Amount = VAT-Inclusive Price × (15 ÷ 115)
Example: R115 × 0.1304 = R15.00
VAT-Exempt and Zero-Rated Items
Not all goods and services attract VAT at 15%. Some are zero-rated (0% VAT) or exempt:
Zero-Rated Basic Foods (0% VAT)
- Brown bread and brown wheaten meal
- Maize meal, samp, mealie rice
- Dried beans, lentils, and legumes
- Rice and cake flour
- Fresh vegetables and fruit
- Vegetable oil and milk
- Eggs and pilchards/sardines in tins
Exempt Supplies
- Financial services (with exceptions)
- Residential rental accommodation
- Educational services by approved institutions
- Public transport (bus, train, minibus taxi)
- Medical services by registered practitioners
VAT Registration Requirements
Businesses must register for VAT with SARS if:
- Compulsory registration: Taxable turnover exceeds R1 million in any 12-month period
- Voluntary registration: Taxable turnover exceeds R50,000 in any 12-month period
Registered VAT vendors must:
- Charge VAT on taxable supplies
- Issue tax invoices
- Submit VAT returns (monthly or bi-monthly)
- Keep records for 5 years
VAT on Invoices
A valid tax invoice must include:
- The words "Tax Invoice"
- Supplier's name, address, and VAT number
- Customer's name and address (for invoices over R5,000)
- Invoice number and date
- Description of goods/services
- VAT amount shown separately or statement that VAT is included
South African VAT History
VAT was introduced in South Africa on 29 September 1991 at a rate of 10%. The rate has changed over time:
- 1991: 10% (introduction)
- 1993: 14%
- 2018: 15% (current rate)
Pro Tip
When quoting prices to customers, South African consumer protection laws require that the displayed price must be the final price including VAT. Always ensure your advertised prices are VAT-inclusive.
Disclaimer
This calculator provides estimates for general information purposes. For official VAT calculations, invoicing, or tax advice, please consult a registered tax practitioner or SARS directly.