Every country has its own regulations and systems for application of VAT (Value Added Tax). VAT is not applied at a flat rate when the product has been completed. Instead, it is applied in a step wise process as the product is being developed. When a product is being created, value is added at each development stage. At the end of the development process, the cumulative value is termed as the total VAT. In addition to that, this figure is included in the price of the product and paid by the customer. As it is written above, the regulations of calculating VAT vary from one country to the other. In South Africa as well, a particular set of regulations is applied in accordance with the country policies to determine VAT.
VAT in South Africa and the implications
- In South Africa, VAT is applied at a fixed rate of 14% for all the products and services. However, if you are not a South African national and have made purchases while touring the country, you would not be required to pay VAT.
- There is a price limit above which buyers can reclaim the VAT that they have paid. For instance, if you have purchased a product with a price higher than R250, you are eligible to apply for VAT refund. There is a proper process which you need to follow in this relation.
Process used to get VAT refund
If you are not a national of South Africa, you can claim a refund of the VAT paid. There are few key steps which you need to take in this relation.
- If you are a foreigner, you can get the VAT refund by getting a proper invoice from the shopkeepers. This is basically an assurance that you have paid VAT in South Africa even after not being a resident. The invoice is used when you are applying for VAT refund.
- The name and address of the buyer have to be provided for claiming the VAT refund. These details are used for the purpose of verification.
- There should be a purchasing receipt which shows the price of the product. Along with that, it should highlight that the price includes the VAT charged at 14%. If all this information is present, it would be easy for the user to get a VAT refund.
Core plus points of the VAT calculator
Why do you need to use manual calculation methods when an automated tool is available? VAT calculators help you with effective accurate calculations.
- By using a VAT calculator, there is no need to perform calculations manually and spend lengthy time spans for this purpose. To determine the VAT value, simply enter the product price and percentage of VAT. For example, if you are living in South Africa and you have purchased a product worth R270, the VAT would be 14%. According to these entered inputs, the tax amount and Gross Price would be determined by the calculator.
Using a technological tool reduces the chances of errors and enhances efficiency level.