South African tax education
Input VAT vs Output VAT Explained
Output VAT is VAT charged on taxable sales. Input VAT is VAT a vendor may be allowed to claim on qualifying business purchases. The VAT201 return compares the two.
Last updated: 19 May 2026
- Confirm VAT registration status before charging VAT.
- Keep VAT invoices, VAT201 calculations, and bank proof by tax period.
- Check SARS guidance before relying on thresholds, deadlines, or invoice rules.
The simple formula
For many VAT vendors, the basic VAT calculation is:
Output VAT on taxable sales minus claimable input VAT on qualifying purchases equals VAT payable or refundable.
What is output VAT?
Output VAT is VAT charged by a vendor on taxable supplies. If you invoice a customer for a standard-rated supply, the VAT portion is output tax that must be declared to SARS.
What is input VAT?
Input VAT is VAT charged to you by suppliers that you may be entitled to deduct, if it relates to taxable activity and the claim is supported by valid documents. Not every expense with VAT on it is automatically claimable.
Example
| Item | Amount |
|---|---|
| Output VAT on sales | R15 000 |
| Claimable input VAT on purchases | R6 000 |
| VAT payable to SARS | R9 000 |
If input VAT is higher than output VAT, the return may show a refund, subject to SARS checks.
Common mistakes
- Claiming input VAT without a valid tax invoice.
- Claiming VAT on private or exempt-supply expenses.
- Forgetting output VAT on deposits or adjustments where applicable.
- Treating zero-rated and exempt supplies as the same.
- Not reconciling the VAT control account after submission.
FAQ
Is output VAT my money?
No. It is VAT collected from customers and declared to SARS.
Can input VAT create a refund?
Yes, if claimable input VAT exceeds output VAT, but SARS may verify the claim.
Can non-vendors claim input VAT?
No. Input VAT claims generally require VAT vendor status and valid supporting requirements.
Next steps
- Review your VAT category and current registration status.
- Reconcile sales, purchases, output VAT, and input VAT before the next VAT201.
- Save invoice proof and VAT working papers in one folder for the tax period.
Official checks
Use these SARS pages to confirm the latest position before filing, registering, or changing a tax position.
Source and disclaimer
This site provides general educational information for South African taxpayers. It is not tax, legal, accounting, or financial advice. Tax rules and SARS processes can change, so verify current requirements with SARS or a qualified professional before acting.