VAT SUPPLIES ARE DIVIDED into three main VAT categories: standard-rated, zero-rated, and exempt supplies. Understanding the difference is essential for business owners, as it affects pricing, compliance, and the ability to claim input VAT back from SARS.

VAT is non-cumulative, meaning that a credit/deduction is allowed for VAT paid in previous stages, within the production and distribution chain. The vendor is required to pay the difference between the output tax and the input tax or claim a VAT refund where the input tax exceeds the output tax.

There are three categories of supplies that can be made by a VAT vendor: standard-rated, zero-rated and exempt supplies. Output tax must be levied on all supplies except exempt supplies.

Understanding the distinction between standard-rated, zero-rated, and exempt supplies is essential for ensuring compliance and optimising VAT recovery. The standard rate of VAT is the default rate that applies to most goods and services. In South Africa, the standard VAT rate is currently 15%.

For VAT purposes all supplies are treated as either being standard rated, zero-rated, or exempt. Supplies that are standard rated or zero-rated are taxable supplies as defined. Standard rated supplies are supplies that are subject to VAT at the prescribed rate of 15%.

Updated July 2026 | South Africa 2026/27 Tax Guide All Types of Taxes in South Africa: Complete 2026/27 Tax Guide with Due Dates South Africa has a layered tax system that covers income, payroll, business profits, consumption, property transfers, investment gains, inheritances, imports, fuel, excise goods, environmental charges and municipal property rates. This guide explains the main taxes ...

There are three categories of supplies that can be made by a VAT vendor: standard-rated, zero-rated and exempt supplies. Output tax must be levied on all supplies except exempt supplies.

South African Revenue Service lists all taxes you need to know about, including Income Tax, VAT, and Capital Gains Tax. Learn more!

Discover the key differences between VAT exemption and zero-rated VAT in our guide and learn how these taxation concepts impact businesses and consumers,

Explore different tax types and how to maximise your savings through effective tax planning and claiming deductibles.