## Zoho Inventory Documentation Index

Access the complete documentation index at:
https://www.zoho.com/za/inventory/llms.txt

Use this file to discover all available documentation pages before proceeding.

# VAT - Overview

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

## Configure VAT in Zoho Inventory

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

### Enable VAT Settings

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

*   Go to _Settings_ in the top right corner and click **VAT**.
    
*   Slide the toggle next to _Is your business registered for VAT?_
    
*   Enter the _VAT Registration Number_.
    
*   Mark _Enable trade with contacts outside South Africa_ if your business involves international trade.
    
*   Enter the **VAT Registered On** date.
    
*   Click **Save**.
    
    ![Enable VAT](/inventory/help/images/za-vat/enable-vat.png)

### 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:

*   Select **VAT Rates** under _VAT_.
    
*   Click **\+ New VAT** in the top right corner.
    
*   Enter the _Tax Name_ and _Rate_.
    
*   Select a _Tax Type_ from the dropdown.
    
*   Click **Save**.
    
    ![Create VAT](/inventory/help/images/za-vat/create-vat.png)

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:

*   Hover over the tax rate you’ve created and click the down arrow next to it.
    
*   Select **Edit** and make the required changes.
    
    ![Edit VAT](/inventory/help/images/za-vat/edit-vat.png)
*   Click **Save**.
    

### Mark a VAT Rate As Inactive

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

*   Hover over a default tax rate and click the down arrow next to it.
    
*   Select **Mark as Inactive**.
    
    ![Mark VAT Inactive](/inventory/help/images/za-vat/inactive-vat.png)

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:

*   Hover over the tax rate you’ve created and click the down arrow next to it.
    
*   Select **Delete**.
    
    ![Delete VAT](/inventory/help/images/za-vat/delete-vat.png)

The VAT rate will be deleted.

## VAT Rules

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

*   Standard Rate \[15%\]
*   Zero Rate \[0%\]
*   Exempt

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

*   Select **VAT Rates** under _Advanced Tax Automation_.
    
*   Hover over the tax rate that you want to set as default.
    
*   Click **Mark as Default**.
    
    ![Mark VAT as Default](/inventory/help/images/za-vat/default-vat.png)

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 Inventory, 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:

*   Go to **Customers** from the left sidebar.
*   Click **+New** in the top right corner.
*   Enter the necessary details.
*   Select the applicable VAT treatment from the dropdown next to _VAT Treatment_.
*   Click **Save**.

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%)