1.7.1 VAT Categories
There are three categories of supplies that can be made by a VAT vendor: standard-rated, zero-rated and exempt supplies.
Standard-rated supplies are supplies of goods and services on which output VAT is levied at a rate of 15%. The input VAT incurred on purchases of goods and services to generate standard-rated supplies can be deducted from output VAT payable to SARS.
Zero-rated supplies are supplies of goods and services on which output VAT is levied at a rate of 0%. The input VAT incurred on the purchase of goods and services to generate zero-rated supplies can be claimed against output VAT payable to SARS.
Exempt supplies are not subject to VAT. No output VAT, either at 14% or at 0%, is levied on exempt supplies. Input VAT incurred on expenses to make exempt supplies cannot be claimed against output VAT due to SARS.
Tasks
Watch the following video to gain more insight into the various categories of VAT:
