South Africa VAT Reporting Requirements: Full Guide for SARS Compliance (2025)

Introduction

Value-Added Tax (VAT) is a key tax mechanism in South Africa, overseen by South African Revenue Service (SARS). Businesses that are VAT vendors must comply with specific registration, return-filing and record-keeping rules. This article outlines the important VAT reporting requirements that apply to South African vendors.

What is VAT and when does it apply?

VAT is an indirect tax on the consumption of goods and services. According to SARS:

The standard VAT rate is 15% on taxable supplies by registered vendors. (South African Revenue Service)
Some supplies are zero-rated or exempt under specific conditions. (South African Revenue Service)
A vendor is someone who makes taxable supplies in the course of an enterprise. (South African Revenue Service)

Registration requirements

Before VAT returns are filed, a business must determine whether it must register as a VAT vendor. Key points:

Compulsory registration applies when taxable supplies exceed R1 million in any consecutive 12-month period. (South African Revenue Service)
A business must apply within 21 business days after exceeding the threshold. (South Africa Government)
Voluntary registration may be available where taxable supplies are below R1 million but meet other criteria. (South African Revenue Service)
Non-resident suppliers of electronic services may also be liable for registration. (PwC)

VAT reporting: Returns, payments and records

Once registered, a vendor has ongoing reporting obligations:

VAT Return (VAT 201)

A vendor must complete the VAT 201 return for each tax period. (South African Revenue Service)
The return captures output tax (VAT charged on supplies) and input tax (VAT incurred on purchases). The difference is payable to SARS or eligible for refund. (South African Revenue Service)
Submission deadlines: The return and payment must be submitted by the 25th day or last business day of the month following the end of the tax period (for eFiling vendors). (South African Revenue Service)
Vendors must keep proper records (tax invoices, import/export documents, accounting records) for a period of five years. (South African Revenue Service)

Submitting and correcting returns

Returns should ideally be submitted via SARS eFiling. (South African Revenue Service)
If a vendor discovers a mistake or omission, they can request a revision/correction of the VAT201 return, subject to the rules provided by SARS. (South African Revenue Service)

New compliance for VAT apportionment (effective for financial years ≥ 1 Jan 2024)

One of the more recent changes relates to how vendors allocate (“apportion”) input tax when taxable and non-taxable supplies are mixed. Under Binding General Ruling 16 (Issue 3) (BGR16 Issue 3):

Applies to financial years beginning on or after 1 Jan 2024. (ENS Africa)
Introduces a “true-up” adjustment: vendors who used the previous year’s turnover to estimate the current year’s apportionment ratio must adjust the difference within nine months after the financial year-end. (ENS Africa)
A mandatory reporting obligation: vendors must submit to SARS by email details including vendor name, VAT registration number, apportionment method/formula applied, and the apportionment ratio for the year. When applying the new formula for the first time, data for the preceding three years must be submitted. (ENS Africa)
Tax practitioners recommend getting specialist advice because of the exclusions and adjustments under the new ruling. (BusinessTech)

Practical tips for compliance

Ensure you monitor your 12-month taxable supplies continuously to know when the R1 million threshold is reached.
Set up eFiling for VAT submissions to benefit from the slightly extended deadline (last business day of the month vs 25th).
Keep supporting documents and records organised for at least five years — SARS may audit or request documentation.
If your business mixes taxable and non-taxable supplies (or exempt supplies), review whether BGR16 Issue 3 applies to you, and be ready for the true-up and reporting requirements.
Consider getting a tax practitioner involved if you are uncertain about the apportionment rules or if your supplies are complex (e.g., exports, electronic services, non-resident suppliers).
Stay aware of updates: SARS manual and guides evolve, so ensure your systems reflect the current rules. For example, the VAT201 guide was updated 12 May 2025. (South African Revenue Service)

Summary

Complying with VAT reporting requirements in South Africa means: registering when obliged, filing accurate VAT returns on time, maintaining records, and keeping up to date with new rules — particularly for apportionment under BGR16 Issue 3. Businesses that stay ahead of these obligations reduce the risk of penalties and stay in good standing with SARS.

South Africa VAT Reporting Requirements