📢 VAT Rate Increase
he South African Revenue Service (SARS) has confirmed that the standard VAT rate will increase from 15% to 15.5%, effective 1 May 2025. This adjustment impacts all taxable goods and services, including imported items and certain services from non-resident suppliers.
As a Storefront merchant, it’s important to prepare your store for this change to ensure compliance and accurate pricing.
🔍 Key Points to Note:
The new 15.5% VAT rate takes effect from 1 May 2025.
An additional increase to 16% is scheduled for 1 April 2026.
Time of Supply Rules:
The applicable VAT rate is determined by the earlier of invoice issuance or payment receipt. Special rules may apply to certain transactions such as fixed property sales and lay-by agreements.
Pricing Display:
All price displays, quotes, and marketing materials must be updated to reflect the new rate. SARS is allowing temporary use of signage to explain price adjustments at checkout until 31 August 2025.
Agreements:
Review all current contracts to determine whether the VAT increase may be passed on to customers. If your agreement prohibits VAT-related price increases, you may not recover the additional cost.
Systems & Documentation:
Please ensure that your accounting systems, billing software, and invoice templates are correctly configured to apply the new VAT rate from 1 May 2025.
VAT201 Returns:
SARS will update the VAT201 return form to accommodate the new rate. Vendors must report transactions accurately based on the correct timing and applicable rate.
For official guidance, download the SARS Pocket Guide here:
Last updated