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Penalties for late payment of VAT depending on the method of payment

03 December 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I see that for the last few months SARS automatically charges penalties on the VAT returns if they are not paid before the 25th. This causes me to write to SARS every month and ask them to write it off. Please can you advise if you have encountered the same problem with other practitioners?

A: You did not indicate how the amount due is paid.  

In terms of proviso (iii) to section 28(1) of the Value-Added Tax Act a vendor registered with SARS to submit returns electronically is deemed to have submitted the return and made payment within the period ending on the twenty-fifth day if the vendor submits the returns and makes full payment of the amount of tax electronically and in the prescribed form and manner within the period ending on the last business day of the month during which that twenty-fifth day falls.  

If payment is for instance made by cheque after the twenty-fifth day SARS would be entitled to levy penalty.  The same would apply if the return is not submitted electronically.  

The payment must also be in SARS’s bank before close of business –for some banks this would mean before 12:00 on the last day.  If not, SARS would also levy the penalty.

Follow-up Q: The return is submitted via efiling and the payment via the credit push method on efiling.

Follow-up A: You have now indicated that the 'return is submitted via efiling and the payment via the credit push method on efiling’.  Consequently, as indicated in our previous guidance, the payment of the amount of tax can be made on the last business day of the month during which that twenty-fifth day falls.  SARS would therefore be wrong to levy a late payment penalty in this instance if the payment was received by them on the last business day of the month. 

In summary: the general rule is that payment due on a VAT201 must be made on before the twenty-fifth day of the relevant month.  If, however, the electronic route is followed (efilng and credit push), the payment can be made after the twenty-fifth day until the last business day of the month.  This is what we explained in our previous guidance.  If the last day of the month falls on a Sunday for instance, the payment will have to be made on the Friday to avoid the penalty.  

We trust this is clearer.  As indicated we are not aware of other tax practitioners who are experiencing the same problem.  

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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