VAT threshold increase and new Turnover based tax system for small business
Although it was announced in the Budget Speech in February 2008, the proposed increase in the compulsory VAT registration threshold has as yet not been finalised. The same applies to the new Turnover-based tax system.
The effective date relating to the increase in the compulsory threshold for VAT vendor registration from R300 000 to R1 million per annum has been delayed until later in 2008, possibly even to 2009.
Therefore VAT vendors whose current taxable supplies exceed R300 000 per annum (but less than the proposed minimum of R1 million per annum) must still remain VAT vendors and cannot de-register for VAT at this stage.
The same applies to the proposed new Turnover-based tax system for small business as announced in the February 2008 Budget Speech – these proposals have not yet been implemented and may become effective later in 2009 once legislated.
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