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ACCOUNTANTS & BUSINESS ADVISORS

Passionate About Your Financial Growth.

VAT Registration

“Every problem is a gift—without problems we would not grow.”
Anthony Robbins

The new VAT registration demystified

As of 11 May 2023, SARS has introduced a stricter VAT registration process in response
to a rise in suspicious VAT registrations. The new process aims to combat fraud and
protect the integrity of the VAT system. Here is a breakdown of the new process:

Important business functions Accounting officers perform

  • Financial Reporting (IFRS and IFRS for SME) that is consistent and transparent and enables the user to make informed decisions.

Financial Reporting (IFRS and IFRS for SME) includes:
– Statement of Financial position
– Statement of Comprehensive Income
– Statement of Changes in Equity
– Statement of Cash flow

  • Analysis of Financial Information to further business efficiency by:

– Identifying the strengths and weaknesses of an entity
– Evaluating internal controls and processes
– Identifying trends
– Implementing Accounting Software or management Systems

  • Draughting of Annual Budgets and Cashflow Forecasts to assist entities in reaching their full potential
  • Business Valuations to determine the economic value of an entity, covering all aspects of value with supporting documentation.
  • Management Accounts can be prepared either monthly or quarterly and provides the user with a clear insight into the financial trading position of an entity.

Management Accounts will enable the user to:

– Make informed decisions based on actual, recent information
– Constantly and effectively measure the performance of an entity
– Gain more control over cash flow
– Detect fraudulent activities
– Minimise annual accounting fees

 

  • Important points to note:

    • VAT registration will only be approved once SARS is satisfied with the application’s
      legitimacy.

    • The new process was implemented on 11 May 2023. Application submitted before
      this date will follow previous processing rules.

    • Not all applicants will be required to visit a SARS branch.
    • The new VAT application process is not as stringent as initially anticipated.

    SARS acknowledges that these measures will inconvenience honest taxpayers and
    apologizes for any inconvenience caused. However, due to the prevalence of fraud, SARS
    emphasizes the importance of conforming to the new VAT registration process. By
    implementing these measures, SARS aims to safeguard the VAT system’s integrity and
    prevent the misuse of taxpayers’ funds through illegitimate VAT refunds. SARS
    appreciates the cooperation of honest taxpayers in combatting whitecollar criminal
    activities.

  • Adriana Taljaard is a recognised member of the professional body SAIPA allocating a designation of Professional Accountant (SA).
    Membership conditions require relevant knowledge in accounting, tax and business management and enforces a strict code of conduct.

    Step 1 Application submission
    Applicants should submit their VAT registration applications via efiling provided they are
    already registered for another tax, such as corporate income tax.

    Step 2 Supporting documents
    SARS will issue a letter to the applicant, specifying the supporting documents required for
    validation of the registration. This letter will have a case number.

    Step 3 Submission of documents
    All the necessary supporting documents must be submitted via Sars Online Query system
    (SOQS) within 21 business days. The case number supplied by SARS must be used to
    submit documents via SOQS.

    Failure to submit the documents within this timeframe will result in the case being closed
    automatically, no VAT number being issued, and a Notice of Rejection letter being sent to
    the applicant.

    Step 4: document Validation
    SARS, will employ artificial intelligence to analyse the submitted documents. If there are
    no discrepancy, SARS may accept the application, issue a VAT number, forego a physical
    interview with the applicant (Public Officer of the Company).

    However, if any discrepancies are identified from the source documents, SARS will
    request a physical interview. If the applicant is registered for another tax, then a tax
    practitioner with a valid POA can act as a proxy for the applicant.

    If it is the applicant’s firsttime registration, the Public Officer of the company is expected to
    attend the interview at SARS branch nearest to the applicant and provide detailed
    information about the business.

    Step 5: meeting with SARS

    Applicants who have discrepancies in their source documents may be invited to a meeting
    with SARS. For inperson meetings at a SARS branch, applicants must prebook an
    appointment on the SARS website.by clicking on the “Book an Appointment” icon. A
    separate booking icon exclusively for VAT registration may be made available within 48
    hours.

Name Reservation

Any company may be registered with or without a company name. Reserving a name required at least three (3) proposed names in order of preference to allow CIPC to authorise one of the three (3) proposed names.

If a reserved name is not included in the initial application, the company will be registered with its enterprise number. A name may then be added at a later stage through a name amendment, however this will open a new engagement and cost extra. A name amendment requires an approved name reservation and a special resolution to effect a change to the Memorandum of Incorporation (MOI), and this will also open up additional engagements increasing the cost of the initial registration, therefore not suggested for the initial registration of your company.