VAT calculator (South Africa)

What is VAT?

As a value-added tax, only the final consumer pays the VAT – purchases by business at other stages of production do not pay VAT (they are charged VAT, however, those charges act as a credit against the VAT they charge).

Rates

South Africa’s current VAT rate is 15%.

Historic rate changes have been: 1991 (introduction of VAT) – 10%. Increase in 1993 to 14%, increase in 2018 to 15%.

If a price does not mention VAT, then the price is considered to include VAT.

What goods and services are not charged VAT?

The South African Treasury Department keeps a record of goods and services not charged VAT (power point slide).

Popular (but not all) categories are:

• 19 basic food items
• Financial Services
• Residential rental accommodation
• Public and rail transport
• Precious Metals
• Exports
• International Transport Services (such as an airline ticket from Johannesburg to Nairobi)

How to calculate VAT (formula)

VAT is calculated by multiplying the VAT rate (15% in South Africa) by the total pre-tax cost. The cost of VAT is then added to the purchase.

Example: R75 of goods x 15% VAT = R11.25 VAT

R75 of goods + R11.25 VAT = R86.25 total

How to calculate reverse VAT (formula)

To find the VAT from a total, divide the total amount by the VAT rate divided by 100 and plus 1.

Example: R70 total (with VAT) at 15% VAT rate

(15% / 100) + 1 = 0.15 + 1 = 1.15

R70 / 1.15 = R60.87 cost before VAT