South Africa 2025 VAT Increase | Effective from 1st of May 2025

South Africa 2025 VAT Increase | Effective from 1st of May 2025

Info
South Africa 2025 VAT Increase (1 May 2025)
Product: IQ Retail (IQ POS, IQ Accounting, IQ Business & IQ Enterprise)
Minimum required release: 2024.2.0.0
Clients on older versions are encouraged to be upgraded to 2024.2.0.0 or later
Idea
Preparing the old VAT rate
Step 1 – Edit Normal VAT 15%
Step 2 – Tick “Ignore Start Date” and specify End Date 30/04/2025
Step 3 – Click on F10 Accept


Pt 2 Creating a new 15.5% Variation VAT rate
Step 4 - Select 1 Normal VAT (that was edited in steps 1 to 3)
Step 5 - Click on the “Add” button and select “Add Tax Rate Variation”


Step 6 – Specify Start Date 01/05/2025

 

Step 7 – Tick “Ignore End Date”

 

Step 8 – Specify new Tax Rate Percentage of 15.5

 

Step 9 – click on F10 Accept


Step 10 – There will be two sets of 1 Normal Vat now, one for 15% and the other for 15.5%.
Ensure “Effective Date Range” displays correctly on the grid, i.e. 15% VAT rate has an end date of 30/04/2025 and 15.5% VAT rate start date of 01/05/2025. Step 11 – Click on Accept to save changes


Step 11 – Click on Accept to save changes

Pt 3 Increase sell prices (keep exclusive & increase sell price or keep inclusive & decrease exclusive sell price)

3.1 Method 1 - Update Sell Prices via EOD (Automatic) - recommended
Sell prices are automatically adjusted via EOD via the below prompt, which will trigger when the next trading date equals the start date of the new tax variation rate, i.e. when doing an End of Day on 30 April.

Note 1. In a synchronized stock environment, updated prices won’t sync to related companies.
Note 2. Labels will not automatically print after updating prices.
Note 3. Updated prices will conform to the rounding set in Default Settings 2.

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• Selecting “Yes” will ask the user to select a recalc method.
• Selecting “Not now” will postpone the prompt for the next EOD.
• Selecting “never” will dismiss the prompt indefinitely.


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1.2 Method 2 - Update Sell Prices via Stock Price Maintenance (Manual)
User will need to remember to update sell prices by clicking on “Update Sell Prices Based on Tax” button in Stock Price Maintenance (refer to below image) either on Wed 30 April 2025 after trade or before trade on Thursday 1 May 2025 (It cannot be done earlier than Wed 30 April 2025 because recalc is looking at Date+1). The percentage on which the increase is based is fetched/based on the new VAT percentage of 15.5% specified on the tax variation rate (Pt 2).

Idea
We recommend that you use option one for POS and the Price Maintenance module "Recalculate Inclusive Sell Price for Tax Changes(Keep Exclusive). 

Note 1. In a synchronized stock environment, updated prices won’t sync to related companies. It will therefore need to be run in each of the companies.
Note 2. Labels will not automatically print after updating prices.
Note 3. Updated prices will conform to the rounding set in Default Settings 2.

Stock > Sell Price Maintenance



Pt 4 Selecting VAT rate in processing
Selecting old/ new Vat rate in processing won't be necessary.
Instead, old/new vat rates are automatically “fetched” by the transaction date.
• Backdating a GRV / Invoice to a previous VAT period will automatically apply the old VAT rate.
• Doing an RTS/ credit note in a previous VAT period will also see the old VAT rate automatically applied.