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What is the difference between VAT and income tax?

How VAT and income tax differ — one follows your profit, the other your sales.

Income tax and VAT are both taxes your business may deal with, but they tax different things.

Income tax is a tax on profit — what your company has left after costs. Every company is registered for it automatically.

VAT is a tax on sales. If you're registered, you charge 15% on most of what you sell and pay it over to SARS. Not every business has to register — it depends on your turnover.

In short: income tax follows your profit, VAT follows your sales. You can read more about what VAT is and whether you have to register for VAT.

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