VAT BASICS
VAT inclusive vs VAT exclusive prices
A price is VAT-exclusive when VAT still needs to be added. A VAT-inclusive price already contains VAT. Both can describe the same sale, but they answer different questions—and confusing them can make a quote look cheaper than the amount a customer ultimately pays.
VAT-exclusive: add 15%
Use an exclusive price when you want to show the value of the goods or service before VAT. At the standard South African rate, VAT is 15% of that value.
R1,000 excluding VAT + R150 VAT = R1,150 including VAT
VAT-inclusive: do not subtract 15%
If you only know the final price, do not calculate the VAT portion by taking 15% of that final price. The price already includes VAT. Instead, divide the total by 1.15 to find the pre-VAT value, then subtract that value from the total.
R1,150 ÷ 1.15 = R1,000 before VAT
R1,150 − R1,000 = R150 VAT
Which price should you show?
A registered vendor should make the pricing basis clear. Consumer-facing prices are commonly shown inclusive of VAT, while business quotes often show the subtotal, VAT and final amount separately. On a valid tax invoice, the value of the supply, VAT amount and total consideration are important details.
Check your next quote
Enter the price and select the matching pricing basis in the VATTally calculator. It will show the before-VAT amount, VAT portion and total in one view.
This guide covers the standard 15% rate only. Some supplies are zero-rated or exempt; confirm the treatment for your transaction with a tax practitioner.