VAT Settings
In South Africa, Value Added Tax (VAT) is administered by the South African Revenue Service (SARS) and applies to most goods and services supplied in South Africa. If your business is registered for VAT, you can configure your registration details in Zoho Procurement so that the right VAT can be applied to your transactions, including bills, purchase orders, and purchase requests.
Configure VAT
To configure VAT in Zoho Procurement:
- Click Settings in the top right corner of the page.
- Click VAT under Taxes & Compliance.
- In the VAT pane, click VAT Settings.
- Toggle Is your business registered for VAT? to Yes.
- Enter the label for your VAT Registration Number (defaults to TIN) in the VAT Registration Number Label field.
- Enter your VAT Registration Number and click Validate TIN to authenticate it.
- If your business involves international trade, check Enable trade with contacts outside South Africa under International Trade, then enter your Customs Code.
- Enter the VAT Registered On date.
- Click Save.
Your VAT details will be saved, and you can start applying VAT on your transactions.
VAT Treatments
Once VAT is configured, every vendor you add is classified using a VAT Treatment, which describes the supplier of the goods or services in the transaction. The VAT Treatment on the vendor’s record determines which VAT options are available when you create a bill, purchase order, or purchase request for that vendor.
| VAT Treatment | When to Use | Available VAT Options |
|---|---|---|
| VAT Registered | The supplier is located in South Africa and is registered for VAT. | Standard Rate, Zero Rate, Exempt |
| Non VAT Registered | The supplier is located in South Africa but is not registered for VAT. | Out of Scope |
| Overseas | The supplier is located outside South Africa. | Out of Scope |
When the vendor’s VAT Treatment is Non VAT Registered, the supply is Out of Scope of VAT and no VAT rate can be applied. When the vendor’s VAT Treatment is Overseas, the relevant import VAT treatment is applied based on the goods or services being purchased and the documentation associated with the transaction.
VAT Options in Transactions
After VAT is enabled and your vendors and items are set up, the following VAT options can appear across transactions, subject to the vendor’s VAT Treatment described above:
- Standard Rate: 15%
- Zero Rate: 0%
- Exempt
- Out of Scope
Domestic Reverse Charge (DRC)
Domestic Reverse Charge (DRC) is a VAT mechanism prescribed by the South African Revenue Service (SARS) for businesses dealing in valuable metals. Under DRC, the VAT liability shifts from the supplier to the recipient, who accounts for the VAT directly in their VAT return.
You can enable DRC on a transaction when both your organisation and the vendor are VAT-registered entities in South Africa and the transaction involves valuable metals.
To apply DRC on a transaction:
- Create a purchase order, bill, or other transaction as you normally would.
- Check This transaction is applicable for Domestic Reverse Charge (DRC) below the Shipment Preference field.
- Add the line items and complete the rest of the transaction details.
- Save the transaction.
Note: Refer to the South African Revenue Service’s (SARS) guidelines on Domestic Reverse Charge to confirm whether DRC applies to your transaction.