VAT explained
Value Added Tax (VAT) is a secondary tax that is charged on the consumption of goods and services in the economy. In the context of medical practitioners, VAT is charged on the consumption of your services (the provision of healthcare). This means that a portion of your revenue is paid to SARS as VAT. This is known as output VAT and is how SARS collects their VAT revenue.
Reducing my taxable income
Input VAT is an allowance which you can claim to reduce the output VAT payable to SARS. You can reduce your output VAT payable to SARS by claiming input VAT on your practice expenses, which includes your medical malpractice insurance premiums paid to local insurance companies.
How is this achieved?
By choosing a South African medical malpractice insurance offering, you can claim the VAT back on this payment to reduce your output VAT payable.
The below is an example for illustration purposes only
*As the practice income includes VAT at 15%, this is owed to SARS
** Since you can claim 15% of the insurance premium,
you pay R15 000 less in VAT for the year
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