Telematics Grade 11 & 12 VAT Concepts
Dive into the world of VAT with activities exploring VAT concepts, calculations, input/output VAT, VAT vendors, and more. Understand the standard VAT rate, zero-rated items, and exemptions. Get insights into evasion, avoidance, and VAT calculations in a detailed and informative manner.
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Presentation Transcript
Telematics Grade 11 & 12 VAT CONCEPTS AND CALCULATIONS Activities 1,2 Pages 9 - 12
CONCEPTS VAT VALUE ADDED TAX SARS SA REVENUE SERVICES STANDARD VAT RATE 15 % 14 % TO 15 % 1 APRIL 2018 ZERO RATED ITEMS 0 % EXEMPTED ITEMS FRUIT, VEGETABLES BASIC FOOD STUFF SCHOOL FEES, EXPORT SERVICES
VAT INPUT VAT PAID BY A BUSINESS WHEN PURCHASING GOODS AND SERVICES FROM ANOTHER VAT VENDOR. INPUT VAT IS INCLUDED IN THE COST PRICE VAT OUTPUT VAT CHARGED/RECEIVED BY A VAT VENDOR WHEN IT SELLS GOODS AND SERVICES. OUTPUT VAT IS INCLUDED IN THE SELLING PRICE
VAT VENDOR A business who have registered as a VAT vendor and sells goods (trading business) or renders services (service business). It has a VAT number issued by SARS. Registration can be: Compulsory: annual turnover is more than R1 million. Voluntary: Annual turnover is between R50 000 and R1 million.
ACTIVITY 1 evasion; zero-rated; input VAT; avoidance; R1 000 000; output VAT; VAT exempted; 15%; 16%; R50 000 1.1 VAT paid when vendors purchase trading stock is Rent received for a private residence is an example of Tax...refers to legal measures to reduce tax payments. Input VAT 1.2 VAT exempted 1.3 Avoidance
ACTIVITY 1 evasion; zero-rated; input VAT; avoidance; R1 000 000; output VAT; VAT exempted; 15%; 16%; R50 000 1.4 VAT received by an electrician for services rendered 1.5 Standard VAT rate for goods and services is currently 1.6 Businesses with an annual turnover of more than ... have to register for VAT. Output VAT 15 % R1 000 000
VAT INCLUSIVE WHEN VAT IS INCLUDED IN AN AMOUNT (INCLUSIVE), THE CALCULATION FOR VAT WILL BE: AMOUNT X 15 115 VAT EXCLUSIVE WHEN VAT IS EXCLUDED (VAT EXCLUSIVE), THE CALCULATION FOR VAT WILL BE: AMOUNT X 15 100
Activity 2 2.1 Calculate: Output VAT from the CRJ 268 000 x 15 100 = 40 200 Output VAT Owing to SARS
Activity 2 2.1 Calculate: Input VAT from the CPJ 230 000 + 120 000 350 000 x 15 100 = 52 500 Input VAT receivable from SARS
Activity 2 2.1 Calculate: Output VAT from the DJ 345 000 x 15 115 = 45 000 Output VAT Owing to SARS
Activity 2 Posting of VAT amounts. JOUR NAL Debited DAJ OUTPUT VAT 28 750 X 15 3 750 115 Account Account Credited VAT Amount DEBT. CONTROL 7 245 CJ INPUT VAT CRED. CONTROL 18 000 CAJ CRED. CONTROL INPUT VAT 3 750
ACTIVITY 2 2.3 OWING RECEIVABLE OUTPUT VAT CRJ 40 200 DJ 45 000 DAJ (7 245) BAD DEBTS (675) INPUT VAT CPJ 52 500 CJ 18 000 CAJ (3 750) DRAWINGS (350) 77 280 66 400 AMOUNT OWING TO SARS 8 000 + 77 280 - 66 400 = 18 880 PAYABLE
OUTPUT INPUT = AMOUNT PAYABLE TO SARS INCREASING INPUT VAT BY R 3000 MORE Rainbow Stores will pay R3 000 less to SARS
Double check all calculations and figures before transferring it on the VAT return. Use Accounting software (computers) that will ensure accurate recording and calculations. The supervisor/owner should sign off the VAT return forms before submitting it.
Voluntary registration requires annual taxable income between R50 000 and R1 million Ben's turnover for July was R268 000 + R300 000 = 568 000 (exclusive). He complies to VAT legislation and will build goodwill with his customers and SARS. He can collect VAT and pay SARS what is due to them after his VAT input have been deducted, even if his income exceeds R1 million.
He will pay much more for interest and penalties on ALL the VAT that he did not pay since his business started SARS can close down his business and he will lose everything, even his private assets.
He can lose his trading licence. Even if he is not registered, he still has to meet (comply to) all VAT requirements/legislation He does not have to appoint a bookkeeper he can maintain his own records. He should do the right thing and register and get his records in order without delay.
