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Submission Date For VAT Returns Clarified
The South African Value Added Tax Act (the Act) has been amended to change the date of submissions for the e-filling system. Taxpayers are now obliged to file their VAT returns on or before the 25th day of the month following the end of the tax period, as well as still making payment on or before the last business day of the month. Taxand South Africa explains why this is important information for multinationals.
The amendment created uncertainty with regard to the date when VAT returns should be submitted in order to avoid penalties and criminal prosecution. An opinion issued by SARS confirming that as from 1 October 2012 VAT returns must be submitted by the 25th day of the month even though payment may still be made on or before the last business day of the month, added to the confusion.
The uncertainty was whether the amendment effected by the Act applied to all VAT returns to be submitted electronically on or after 1 October 2012 (which would have included the VAT returns for September) or only for VAT returns after this date. It was further unclear as to why a vendor would be required to submit his VAT return by the 25th day of the month, but is allowed to make payment only by the last business day of the month.
Fortunately, SARS issued a notice on 19 October 2012 in which it clarified that SARS does not require vendors to submit their electronic VAT returns by the 25th day of the month. Vendors may continue to file their VAT returns and make payment on or before the last business day of the month following the end of a tax period without running the risk of penalties, interest or criminal prosecution.
SARS also advised that proviso (iii) to section 28(1) by the Act will be amended again in the 2012 Tax Administration Amendment Bill to clarify the position.
It is important to note if a company fails to submit a VAT return by the last business day of the month following the end of a tax period, they are guilty of an offence and are therefore liabe. If payment of the VAT is not made in full on or before the last business day of the month following the end of a tax period, then the company is liable for a late payment penalty of 10% of the VAT amount payable. The taxpayer will also be liable for interest with effect from the 25th day of the month in which the payment should have been made.