VAT in Transactions
In Zoho Books, you can create VAT-compliant sales and purchase transactions. Once you have enabled VAT, added customers, vendors, and items to your organization, you can create transactions that are up to VAT standards.
Let’s take a look at the VAT Rates that are applicable on the sales and purchase transactions.
Once you enable VAT for your organisation, the following VAT rates will be created automatically:
- Standard Rate [15%]
- Zero Rate [0%]
- Exempt
| VAT Treatment | Sales | Purchases |
|---|---|---|
| VAT Registeres | Standard Rate, Zero Rate, Exempt | Standard Rate, Zero Rate, Exempt |
| Non-VAT RRegistered | Standard Rate, Zero Rate, Exempt | No Tax |
| Overseas | Zero Rate | For import goods: Bill of Entry For import services: Reverse Charge Mechanism Others: No Tax |
VAT in Sales Transactions
VAT Registered
If you sell your goods or services to a VAT-registered customer who resides in South Africa, you can apply one of the following rates:
- Standard Rate (15%)
- Zero Rate (0%)
- Exempt
Non VAT Registered
Non VAT registered customers are those whose business location is in South Africa but are not VAT registered. For such customers, you can apply one of the following rates:
- Standard Rate (15%)
- Zero Rate (0%)
- Exempt
Overseas
Overseas is a type of VAT treatment applicable for customers who are outside South Africa. When you sell goods or services to such customers, you must apply the Zero Rate on them.
VAT in Purchase Transactions
VAT Registered
If you purchase goods or services from a vendor who is VAT-registered and is located in South Africa, you can apply one of the following rates:
- Standard Rate (15%)
- Zero Rate (0%)
- Exempt
Non-VAT Registered
If you purchase goods or services from a vendor whose business location is South Africa but is not VAT registered, then the supply of goods or services is not taxable.
Overseas
If you import goods or services from a vendor who is outside of South Africa, you’ll have to create a bill of entry for the goods and apply reverse charge for the services.
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