The new VAT return form has arrived
The South African Revenue Service (Sars), in a bid to align with international best practice, on June 28 2010 introduced a new VAT return form (VAT 201). The new VAT 201 form requires the separate declaration of Value-Added Tax in respect of the import and export of goods into and out of the Republic of South Africa. Although the 2010 Taxation Laws Second Amendment Bill proposes that the VAT Act be amended to allow vendors to account for VAT on imported services on their VAT return (as opposed to the completion of a separate return), no such separate disclosure for imported services is required on the new form.
The VAT 201 form changes may well impact vendors' accounting systems which may have to be reconfigured to support the need to now reflect the value of transactions that involve the import of capital goods and non-capital goods, and the export of goods.
The changes to the VAT 201 form will impact all vendors, but specifically vendors involved in the import and export of goods. These vendors will now be required to indicate separately on their VAT forms the value of all transactions involving the import and the export of goods.
The new information requirements that have been added to the form include the following additional information fields that will have to be completed:
- Field 2A for the value of goods exported from South Africa during the tax period;
- Field 14A for the input tax on capital goods (such as machinery and equipment) imported during the tax period;
- Field 15A for the input on non-capital goods (such as consumables or material) imported during the tax period.
Where fields 2A, 14A and 15A have been completed, it will also be mandatory to fill in the vendor's Customs Code. The Customs Code, allocated by Sars to importers and exporters, will serve to link the information declared for Customs purposes to the information declared for VAT purposes.
Sars's intention is that this requirement will serve to inform and enhance risk assessment across the different taxes administered by Sars. However, from a vendor perspective, it will require further administrative procedures to ensure that this information is accurately declared.
It is important for vendors to ensure that the information reflected on the VAT return is accurate. The vendor's authorised representative, who signs the VAT 201 form, is deemed to know and understand the meaning of all VAT return information disclosed. Where a person knowingly makes false statements regarding a vendor's tax affairs, that person may be guilty of an offence and be exposed to a criminal prosecution. Further, where a VAT return is considered to be incomplete or inaccurate, Sars may refuse to pay interest on delayed VAT refunds due to the vendor.
These consequences are a clear indication of the importance for any business to comply with the administrative requirements of the VAT legislation.
*Karen Delport is a senior associate at ENS