List of exempt and Zero rated items
The main difference between zero rate and exempt supplies is that the suppliers of zero-rated goods and / or services can still reclaim all their input VAT, but the suppliers of exempt goods are either not registered for VAT or if they are, they cannot reclaim their input VAT.
The following goods and services are zero-rated:
- Exports
- 19 basic food items
- Illuminating paraffin
- Goods which are subject to the fuel levy (petrol and diesel)
- International transport services
- Farming inputs
- Sales of going concerns
- Certain grants by government.
Basic foodstuffs zero-rated in South Africa
- Brown bread.
- Maize meal.
- Samp.
- Mealie rice.
- Dried mealies.
- Dried beans.
- Lentils.
- Pilchards/sardinella in tins.
- Milk powder.
- Dairy powder blend.
- Rice.
- Vegetables.
- Fruit.
- Vegetable oil.
- Milk.
- Cultured milk.
- Brown wheaten meal.
- Eggs.
- Edible legumes and pulses of leguminous plants.
Goods and services exempted from VAT are:
- Non-fee related financial services
- Educational services provided by an approved educational institution
- Residential rental accommodation
- Public road and rail transport.
VAT404 SARS Guide for Vendors
Zero-rated supplies
Zero-rated supplies are taxable supplies on which VAT is levied at a rate of 0%. The application of the zero-rate must be supported by documentary proof acceptable to the Commissioner. Vendors making zero-rated supplies are still able to deduct input tax in full on the goods or services acquired in the making of the zero-rated supplies.
Last modified: Thursday, 29 March 2018, 12:49 PM