VAT registration in South Africa is compulsory once your taxable supplies exceed a prescribed threshold in any twelve-month period, and voluntary registration is available below it subject to conditions. Registration is done with SARS.
The compulsory threshold is tested on a rolling twelve-month basis and also on reasonable expectation, so a business can become liable to register partway through a year. Registering late carries penalties and interest on VAT that should have been charged.
Business Requirements at a Glance
VAT registration is assessed on the following.
- Whether taxable supplies exceeded the compulsory threshold in any twelve-month period
- Whether there is a reasonable expectation of exceeding it under a contractual obligation
- For voluntary registration, whether taxable supplies exceed the lower voluntary threshold
- That the enterprise carries on a business activity continuously or regularly in South Africa
- A South African bank account in the name of the enterprise
- Verification of the business address and activities
Registration and Legal Requirements
Registration is an obligation once the compulsory threshold is met, not an option. Failing to register when required means you still owe the VAT you should have charged, plus penalties and interest.
Voluntary registration below the compulsory threshold is available but conditional, and SARS applies verification because the vendor becomes entitled to claim input VAT.
Documents and Ownership Information Required
SARS requires the entity registration documents, identity documents for directors, members or the sole proprietor, proof of the business address, bank account details in the name of the enterprise, and evidence of the turnover relied on.
Verification is common and can include a physical inspection of the business premises. Applications from businesses without a verifiable address are frequently declined.
Tax, Licence and Compliance Requirements
Thresholds and rates are set in legislation and revised, commonly with each annual budget. This page does not restate them, because an out-of-date figure would be actively misleading. Confirm the current figures with SARS. The compulsory and voluntary thresholds are among those figures.
Once registered, you must charge VAT on taxable supplies, issue valid tax invoices, and submit returns for every period whether or not you traded.
Deregistration is possible where turnover falls below the threshold, but it triggers an exit charge on assets on hand, which is commonly overlooked.
Process, Deadlines and Ongoing Obligations
Monitor turnover against the threshold on a rolling basis rather than at year end. Businesses commonly discover they crossed it months earlier, by which point the liability has accumulated.
Weigh voluntary registration carefully. It allows input VAT claims but imposes ongoing compliance obligations and makes you more expensive to customers who cannot claim VAT back.
This page is general information and not legal or tax advice. Confirm current thresholds, rates and requirements with SARS or a registered tax practitioner, since they change with each budget.
Frequently Asked Questions
When must I register for VAT?
Once taxable supplies exceed the compulsory threshold in any twelve-month period, or where there is a reasonable expectation of exceeding it under a contract.
Can I register voluntarily?
Yes, above a lower voluntary threshold and subject to conditions. SARS applies verification because registration allows input VAT claims.
What if I registered late?
You still owe the VAT you should have charged, plus penalties and interest. Monitor turnover on a rolling basis.
Can I deregister?
Where turnover falls below the threshold, but deregistration triggers an exit charge on assets on hand.
Confirm the current thresholds and registration requirements with SARS. This page is general information and not legal or tax advice. Confirm current thresholds, rates and requirements with SARS or a registered tax practitioner, since they change with each budget. See statutory requirements and browse all business and compliance requirements.