Zoho Invoice

Videos

Global
United States
United Kingdom
Canada
Australia
India
Saudi Arabia
United Arab Emirates
Bahrain
Kuwait
Oman
Qatar
Kenya
Mexico
South Africa

VAT - Overview

This section will give you a brief overview about how you can configure VAT in Zoho Invoice.

Configure VAT in Zoho Invoice

You’ll have to configure your VAT settings by enabling VAT and setting up VAT rates in Zoho Invoice to get started. Here’s how:

Enable VAT Settings

Here’s how you can enable VAT settings for your organization:

VAT Rates

Once VAT is enabled, the following tax rates will be added to your organization and will be automatically applied to future transactions:

VAT Rate Description
Standard Rate [15%] Most of the goods and services that are included in transactions after April, 2018 fall under this tax rate.
Zero Rate [0%] A tax rate of 0% is applied on goods that are agricultural supplies or residential lettings. Services that include road and rail transport, financial services, money lending, retirement and medical benefits, and international support are zero-rated.
Exempt Exempt is provided in the following cases:
  • Non-fee related financial services
  • Educational services provided by an approved educational institution
  • Residential rental accommodation
  • Road and rail public passenger transport
Change in use (Non-taxable supplies) [15%] Purchasing a good for business, intending for making taxable supplies and later using it for personal use.
Change in use (Taxable supplies) [15%] Purchasing a good for personal use and later using it for taxable supplies.
Export of second-hand goods Purchasing a second-hand good and exporting it later.
Supply of accommodation exceeding 28 days [15%] When accommodation is provided for more than 28 days, the VAT will be calculated only for 60% of the total cost.
Supply of accommodation not exceeding 28 days [15%] When accommodation is provided for 28 days or less than 28 days, the VAT will be calculated for the total cost.

Create a VAT Rate

You can create a new VAT rate, for example, the Old Standard Rate [14%]. Here’s how:

The new VAT rate will be created and can be applied when you create a transaction.

Edit a VAT Rate

Note: You can only edit the VAT rate that you have created. Changes cannot be made to the default VAT rates.

Here’s how you can edit a VAT rate:

Mark a VAT Rate As Inactive

The default taxes that you don’t want to use can be marked as inactive. Here’s how:

The VAT rate will be marked as inactive.

Delete a VAT Rate

Note: You cannot delete default VAT rates.

Here’s how you can delete a VAT rate:

The VAT rate will be deleted.

VAT Rules

Once you enable VAT for your organization, the following VAT rates will be created automatically:

You can mark any of these tax rates as default. Here’s how:

Now, the tax rate will be set as the default tax rate and will be applied automatically when you create a transaction unless the item is associated with a different VAT rule.

VAT Treatment

In Zoho Invoice, you can create VAT-compliant transactions once VAT has been enabled. To do this, you can associate a VAT treatment to your customers based on which VAT will be applied to their transactions.

Here’s how you can associate a VAT Treatment:

VAT Treatment Description VAT Rate
VAT Registered The customers whose business location is in South Africa and are registered with SARS to charge VAT on their sales.
  • Standard Rate (15%)
  • Zero Rate (0%)
  • Exempt
Non VAT Registered Non VAT registered customers are those whose business location is in South Africa but are not VAT registered.
  • Standard Rate (15%)
  • Zero Rate (0%)
  • Exempt
Overseas Overseas is a type of VAT treatment applicable for customers who are outside South Africa.
  • Zero Rate (0%)

VAT Summary Report

This report provides a comprehensive overview of the Input VAT and Output VAT over a specific period. Here’s how you can generate a VAT summary report:

Now, the VAT summary report will be generated. This report helps to determine the net VAT payable to or refundable by the South African Revenue Service.

Apply Domestic Reverse Charge to Transactions

You can track and apply Domestic Reverse Charge (DRC) for your Sales transactions in Zoho Invoice. This mechanism is applied when a transaction involves valuable metals that are delivered to customers who are VAT registered.

To apply DRC on a transaction, the associated customer’s tax treatment must be VAT Registered. You can enter the VAT Registration Number of your customer in the Customers module.

Now, you will be able to apply DRC for this customer’s transactions like quotes, invoices, recurring invoices, and credit notes. Here’s how:

Now, Domestic Reverse Charge will be applied to the invoice.

Was this document helpful?
Yes
No
Thank you for your feedback!