Improved Value-Added Tax Processes and Procedures

Since April 2011 SARS has been introducing changes to Value-Added Tax (VAT) that are aimed at improving its systems, simplifying processes and enabling compliance.

The first changes to VAT were implemented in April 2011 and included the following:
– The introduction of an enhanced VAT201 Declaration with additional fields for demographic information and the declarant’s signature
– A unique 10-digit Payment Reference Number (PRN) which links the actual payment made to the payment declared on the VAT201 Declaration for a specific period
– The discontinuation of the automatic issuing of VAT201 Declarations and the mandatory requirement for vendors to request their VAT201 Declarations from SARS.

As of May 2011 the following improvements and enhancements have been implemented:
– The introduction of a Request for Correction functionality to enable vendors to revise their VAT201 Declarations
– A new SARS Risk Profiling System which will evaluate all VAT 201 Declarations submitted.
– As of 1 July 2011, the following change will be implemented:
– The discontinuation of all manual debit order arrangements currently registered with SARS for payment of VAT 201 declarations.

Discontinuation of Manual Debit Orders

Debit order arrangements currently registered with SARS for the filing of manual VAT201 returns will be discontinued with effect from 1 July 2011.
No new debit order applications will be accepted for the manual filing of VAT201 forms. Clients that would like to apply and/or continue to use the debit order function are required to register for eFiling which is free, secure, more convenient, reliable and accurate.

The following payment methods are available to clients:
– eFiling
– Electronically using the Internet
– At a branch of one of the relevant banking institutions
– At a specific SARS branch, for selected payments only.

VAT201 Request for Correction

Vendors will be allowed to revise their VAT201 Declarations for tax periods which fall within the last five years. When making corrections on the VAT201 Declaration, the vendor will be required to complete the VAT201 Declaration in its entirety and not only the section that need to be revised.

To revise a VAT201 Declaration the vendor will be required to request the declaration from SARS via any of the following channels:
– eFiling
– SARS branches
– Phoning the SARS Contact Centre
– Posting a request to SARS.

SARS will determine whether there has been a previous submission or not and pre-populate the VAT201 Declaration accordingly. Once the vendor has revised the VAT201 Declaration it should be submitted to SARS via any of the following channels:
– eFiling
– SARS branches
– Posting it to SARS.

SARS will also have the ability to revise the VAT201 Declaration that was submitted by the vendor for periods that may be under audit. Where such revisions have been made by SARS, the vendor will be informed of the changes via a VAT217 Notification.

Risk profiling

In an effort to reduce fraud, SARS will run a validation check on all VAT201 Declarations submitted. Where a risk is detected, the VAT201 Declarations for the specific period will be subject to a review or audit.

VAT201 selected for review/audit

Where a VAT201 Declaration submitted is selected for review or audit by SARS, a letter will be issued requesting the vendor to submit the required information or documents. The vendor will also be requested to submit output and input tax schedules for the period under review or audit.

Request for output and input tax schedules

The following minimum information is required for output and input tax schedules to ensure the efficient processing of VAT refunds.
In the output tax schedule the following minimum information is required that must be reported in respect of all supplies made:
Date of supply
– Tax invoice number sequence
– Total standard rated supplies
– Total zero-rated supplies
– Total VAT charged
– Total VAT adjustments
– Total VAT collected.

In the input schedule the following minimum information is required that must be reported in respect of all deductions made:
– Date of acquisition
– Name of supplier
– Supplier’s VAT Registration Number
– Tax invoice total
– Zero-rated goods
– Total VAT incurred
– Total VAT adjustments.

Supporting documentation and information must be in A4 format and can be submitted via the following channels:
Electronically via eFiling (if you registered as an eFiler)
– At your nearest SARS branch
– By post.

Vendors who have not yet registered for eFiling are encouraged to do so as eFiling will enable time-saving and hassle-free submissions and payments. Vendors who submit their VAT Declarations manually have to do so by the 25th of each month, while vendors who use eFiling have until the last working day of the month to make submissions and payments. eFiling therefore affords the vendor additional days before payment is due. This represents a significant financial advantage in terms of both cash flow and potential interest that can be earned. To register for eFiling go to www.sarsefiling.co.za.

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