VAT Registration in South Africa 2026

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The 2026 threshold change

From 1 April 2026, compulsory VAT registration applies once your taxable supplies exceed R2.3 million in any consecutive 12-month period — up from the R1 million threshold that had stood for years. The voluntary registration floor also moved, from R50,000 to R120,000.

When registration is compulsory

You must register when your taxable supplies pass R2.3 million in any 12 consecutive months, whether or not those months line up with your financial year. You must also register when a signed contract will take you over that figure. You have 21 business days to apply once you cross the line. Register late and SARS can backdate your registration, meaning you owe output VAT on sales you never charged VAT on, plus penalties and interest.

When voluntary registration makes sense

From R120,000 of taxable supplies you can register by choice. Customers who are VAT vendors claim back the VAT you charge them, and registration lets you reclaim VAT on your own costs, such as equipment, rent, software and fuel. Customers who are consumers cannot claim it back, so adding 15% either raises your prices or cuts your margin. Voluntary registration suits a business that sells mainly to other VAT vendors.

What changes when you're a vendor

You charge 15% output VAT on taxable supplies, claim input VAT on business costs (with valid tax invoices — keep them), and file a VAT201 return for each period, typically every two months, due by the 25th (later on eFiling). Your invoices must meet SARS's tax invoice requirements. Your bookkeeping has to be up to date for each VAT period, because a late or wrong VAT201 return attracts penalties and interest.

Common traps

Claiming input VAT without valid tax invoices.
Missing the 21-business-day registration window.
Charging VAT before your registration is effective.
Crossing the rolling 12-month test mid-year while each financial year stays under R2.3 million.

Common questions

What counts as taxable supplies?

Broadly, the goods and services your business sells that aren't exempt — including zero-rated exports and certain foodstuffs, which count toward the threshold even though the VAT rate on them is 0%. Exempt supplies (like residential rental income and most financial services) don't count.

How do I register for VAT?

Through SARS eFiling, with supporting documents — CIPC registration, proof of address, bank details and evidence of trading or taxable supplies. We prepare and submit the application and handle SARS's queries.

Can I deregister now the threshold is higher?

If your taxable supplies are under R2.3 million you can apply to deregister — but watch the exit VAT: deregistering can trigger output VAT on assets you hold. And if your customers are vendors, staying registered may still be the better deal. Work out the exit VAT and the effect on your customers before you apply.

How often are VAT returns due?

The standard VAT period is two months, with returns due the 25th after the period ends (with extra time on eFiling). High-volume vendors file monthly, and some smaller categories less often. Miss a filing and penalties plus interest apply automatically.

VAT registration in South Africa in 2026