What counts as a valid tax invoice?

SARS sets specific requirements: the words 'tax invoice', the supplier's name and VAT number (and, above a certain value, yours too), the date, a description of what was supplied, and the VAT shown correctly. The detail required depends on the invoice value. If you're unsure whether your supplier invoices qualify, we can check a sample and tell you what's missing.

I've gone over R2.3 million. How quickly must I register?

Once you cross the compulsory threshold you have 21 business days to register with SARS. If you trade over the threshold while unregistered, SARS can claim the VAT you should have charged and collected. Contact us as soon as you see the figure approaching and we'll handle the registration.

I've been claiming VAT off till slips. Is that a problem?

It can be. A standard till slip may not meet the tax-invoice requirements for claiming input VAT, particularly above a certain value where a full tax invoice is required. SARS can disallow those claims at audit and add penalties and interest. Review what you've been claiming and correct it before SARS does.

Should I register for VAT voluntarily before I have to?

It can help if your customers are VAT-registered. Registration lets you claim input VAT on your own costs, and your customers claim back the 15% you charge. If you sell mainly to the public, adding 15% makes you more expensive or cuts your margin. Voluntary registration is available from R120,000 of taxable supplies. Whether it justifies the extra admin depends on who you sell to, so talk to us first.

VAT Mistakes That Cost South African Businesses Money

The VAT rate is 15%. The rules on when to register, what you can claim and what SARS accepts as proof are strict. VAT errors can build up as disallowed claims, penalties and missed thresholds that come to light at audit, when they are expensive to fix. This post covers seven VAT mistakes and what each one costs.

1. Claiming VAT without a valid tax invoice

You can only claim back the input VAT on a purchase if you hold a valid tax invoice that meets SARS's requirements. It must show the words "tax invoice", the supplier's name and VAT number, the date, a description of the goods or services, and the VAT shown correctly. A till slip, a quote, a pro-forma or a supplier's invoice with missing details does not qualify. At audit, SARS disallows every claim that isn't backed by a compliant tax invoice, and you repay it with penalties and interest. SARS requires the invoice even when the VAT was paid.

Before you claim input VAT on a large purchase, check that the supplier's invoice qualifies, with their VAT number and the correct wording. Without a valid tax invoice you cannot make the claim.

2. Missing the rolling 12-month threshold

VAT registration is compulsory once your taxable supplies exceed R2.3 million in any rolling 12-month period (from 1 April 2026, up from R1m; SARS adjusts thresholds from time to time). The period is rolling: any 12 consecutive months, whatever your financial year or the calendar year. A strong run of trading can take you over the threshold mid-year. If you don't notice, you trade unregistered when the law requires you to be registered. SARS can then claim the VAT you should have charged and collected. You pay it yourself, because you can't easily ask customers months later for 15% you never invoiced.

21 business days

Period to register for VAT once your taxable supplies cross R2.3m over any rolling 12 months

3. Charging VAT before you're registered

You cannot charge VAT until you're registered and have a VAT number. If you add 15% to your invoices before registration, you collect VAT you're not entitled to collect, and that causes problems with your customers and with SARS. Charge VAT from the day your registration is effective. The date you apply does not count.

4. Missing the VAT201 deadline

VAT returns are filed on a VAT201 every two months, with payment due by the 25th. If you miss the deadline, SARS applies penalties and interest automatically, without a reminder or grace period. Because the return is due every second month, it is easy to lose track of the cycle. A late return attracts a penalty even when there is nothing to pay, so submit every period on time. Set a standing reminder for the 20th of each filing month, and reconcile your VAT account before you file.

5. VAT is due on the invoice date

On the standard invoice basis, you owe SARS the VAT on the tax-invoice date, which is when you raise the invoice. The date the customer pays doesn't matter. You can end up paying SARS 15% on sales you haven't collected yet. Once you're VAT-registered, a slow-paying customer delays your income and can also force you to pay the VAT from your own reserves. Businesses that qualify for the payments basis, where VAT is due when the money is received, avoid this. Eligibility is limited, so a business on the invoice basis needs to collect its debts promptly.

6. Claiming input VAT on the wrong purchases

Some purchases carry no VAT you can reclaim. You can't claim input VAT on purchases from a supplier who isn't VAT-registered, because there's no VAT in the price. You also can't claim it on entertainment, on most passenger vehicles, or on anything used for private purposes. A claim for 15% on a car purchase or on staff entertainment creates a liability that comes to light at audit. When a cost is partly business and partly private, you can claim only the VAT on the business portion, and the split must be defensible.

A claim that SARS disallows

A business claims R45,000 of input VAT across a two-month period. At audit, a third of it is on invoices missing the supplier's VAT number or the correct wording. SARS disallows that portion, so R15,000 has to be repaid, plus penalties and interest. All of the spending was real, and the invoices did not meet the requirements.

7. Spending the VAT you've collected

The output VAT you charge customers is not income. You hold it on SARS's behalf until the next VAT201. If it stays in your general account and is spent on stock or wages, you can reach the 25th with a VAT bill and no cash to pay it. Keep collected VAT separate from the start, ideally in a separate account, so that it's there when the return falls due.

A system for getting VAT right

VAT has many detailed rules, and small errors repeated across many invoices add up. A system prevents them: file valid tax invoices, check the rolling threshold every month, put the return dates in your diary, keep collected VAT separate and plan for the timing of VAT payments. If you're registered, or close to the threshold, and want your VAT checked, talk to us. Correcting VAT before an audit costs much less than correcting it afterwards.

VAT mistakes that cost South African businesses money