As a South African business, you are required by regulation to charge VAT on your invoices and remit a receipt to the South African Revenue Service. In order to comply with this directive, Paystack will begin charging a 15% VAT fee on our transaction fees from December 1, 2021. You will be able to download a VAT receipt on your Dashboard and you can submit this receipt to the authorities to claim the VAT amount as a reduction in your annual taxes.
How is VAT calculated?
Previously, the transaction charge for South African based businesses was 2.9% + R1 (VAT inclusive) per transaction. Paystack's new charge moving forward is 2.9% + R1 (VAT exclusive). As specified by regulatory requirements, there will now be a 15% VAT charge on the transaction fee.
This means that, for example, for a R1,000 transaction, the fee will be:
[2.9% * (R1,000) + R1] + [15%*(2.9% * (R1,000) + R1]
 + [4.5]
You can now download a VAT receipt for the 15% VAT and submit it to the tax authorities for a reduction in your annual taxes. In this scenario, the VAT amount you can claim is R4.5.
You can visit paystack.com/pricing for a handy calculator that can help break this down.
How can I get my VAT receipt from Paystack?
To download your VAT receipt, please visit your Dashboard preferences under Settings and click on 'Download VAT receipts.'
You'll need to provide your VAT number and specify the billing period you're interested in. Once you've provided these details, you'll be able to download the VAT receipt.
When am I charged VAT?
As a South African business, you will be charged VAT on the Paystack transaction fee according to regulatory requirements.
However, businesses that went live on Paystack before December 1, 2021 will retain the previous VAT inclusive pricing of 2.9% + R1.