VAT Registration Guide (2026)

Value Added Tax (VAT) registration is mandatory for businesses in South Africa that meet certain turnover thresholds. Understanding VAT registration requirements, the registration process, and ongoing obligations is essential for business compliance. This comprehensive 2026 guide covers everything you need to know about VAT registration in South Africa.

What Is VAT?

Understanding VAT

Definition:

• Value Added Tax (VAT)
• Tax on goods and services
• Charged at point of sale
• Collected by businesses
• Paid to SARS

How It Works:

• Business charges VAT on sales
• Business pays VAT on purchases
• Difference paid to SARS
• Input VAT vs. Output VAT

VAT Rate:

• Standard rate: 15% (2026)
• Zero-rated: 0% (certain items)
• Exempt: No VAT (certain items)

Who Must Register for VAT?

Mandatory Registration

You Must Register If:

• Annual turnover exceeds R1 million
• In any 12-month period
• From business activities
• Including all taxable supplies

Calculation:

• Total sales/turnover
• Over 12 consecutive months
• Exceeds R1 million threshold
• Must register within 21 days

Voluntary Registration

You Can Register If:

• Turnover below R1 million
• Expect to exceed threshold soon
• Want to claim input VAT
• Business benefits from registration

Benefits:

• Claim input VAT on purchases
• Professional appearance
• May be required by clients
• Tax planning advantages

Exemptions

You May Not Need to Register If:

• Turnover below threshold
• Only exempt supplies
• Qualify for specific exemptions
• Meet exemption criteria

VAT Registration Threshold

Current Threshold (2026)

Mandatory Registration:

• R1,000,000 per year
• Any 12-month period
• From taxable supplies
• Must register within 21 days

Voluntary Registration:

• Below R1 million
• Can register anytime
• Subject to SARS approval
• Must meet requirements

Important:

• Threshold may change
• Always verify with SARS
• Check current threshold
• Monitor your turnover

Registration Process

Step 1: Determine Eligibility

Check Requirements:

• Calculate annual turnover
• Determine if mandatory
• Consider voluntary registration
• Understand obligations

Gather Information:

• Business details
• Financial records
• Bank statements
• Business registration documents

Step 2: Prepare Required Documents

Documents Needed:

• Business registration certificate
• ID documents of owners/directors
• Bank statements
• Financial statements
• Proof of address
• Business plan (if new business)

Additional Information:

• Business activities
• Expected turnover
• Banking details
• Contact information

Step 3: Register via eFiling

Online Registration:

1. Log In to eFiling

   • Visit www.sarsefiling.co.za
   • Log in with your credentials
   • Navigate to "Organisations" or "VAT"

2. Start Registration

   • Select "Register for VAT"
   • Choose registration type
   • Complete application form
   • Upload required documents

3. Submit Application

   • Review all information
   • Verify documents uploaded
   • Submit application
   • Receive confirmation

Processing Time:

• Usually 7-21 business days
• May take longer if complex
• SARS may request additional information
• Monitor application status

Step 4: Register via SARS Branch

Manual Registration:

1. Book Appointment

   • Book at SARS branch
   • Choose convenient location
   • Select suitable time

2. Bring Documents

   • All required documents
   • Completed forms
   • Supporting documentation
   • ID documents

3. Complete Application

   • Complete forms with SARS assistance
   • Submit documents
   • Receive acknowledgment
   • Wait for processing

VAT Registration Types

Standard Registration

Standard VAT Vendor:

• Most common type
• Full VAT obligations
• Submit returns regularly
• Pay/claim VAT

Requirements:

• Meet turnover threshold
• Taxable supplies
• Standard registration
• Full compliance

Category A (Small Business)

Eligibility:

• Annual turnover R1 million - R50 million
• Simplified requirements
• May have concessions
• Check eligibility

Benefits:

• Simplified compliance
• May have concessions
• Easier administration
• Reduced requirements

Category B (Micro Business)

Eligibility:

• Annual turnover below R1 million
• Voluntary registration
• Simplified requirements
• Specific criteria

Features:

• Simplified returns
• Reduced compliance
• Easier administration
• Check eligibility

VAT Obligations After Registration

VAT Returns

Filing Requirements:

• Submit returns regularly
• Usually bi-monthly
• May be monthly or annually
• Based on turnover

Filing Deadlines:

• Usually 25th of month
• After end of period
• Check specific deadlines
• File on time

Return Types:

• VAT201 return (standard)
• Simplified returns (if eligible)
• Annual returns (if eligible)
• Based on category

VAT Payments

Payment Requirements:

• Pay VAT due by deadline
• Usually 25th of month
• After return submission
• Various payment methods

Payment Methods:

• eFiling payment
• EFT
• Bank deposit
• Other approved methods

Refunds:

• Claim refund if input VAT exceeds output VAT
• Processed after return submission
• Usually 7-21 business days
• Verify banking details

Record Keeping

Requirements:

• Keep all VAT records
• Maintain for 5 years
• Invoices and receipts
• VAT calculations

Records to Keep:

• Sales invoices
• Purchase invoices
• VAT calculations
• Returns and payments
• Correspondence

VAT Rates and Categories

Standard Rate

15% VAT:

• Most goods and services
• Standard rate
• Applied to taxable supplies
• Most common rate

Zero-Rated (0%)

Examples:

• Basic food items
• Exported goods
• Certain medical supplies
• Educational materials

Features:

• No VAT charged
• Can claim input VAT
• Different from exempt
• Specific items only

Exempt Supplies

Examples:

• Financial services
• Residential rental
• Certain educational services
• Specific exemptions

Features:

• No VAT charged
• Cannot claim input VAT
• Different from zero-rated
• Limited items

Calculating VAT

Output VAT (VAT on Sales)

Calculation:

• Sales amount × 15%
• VAT charged to customers
• Collected on behalf of SARS
• Included in price or added

Example:

• Sale: R1,000
• VAT (15%): R150
• Total: R1,150
• VAT to SARS: R150

Input VAT (VAT on Purchases)

Calculation:

• Purchase amount × 15%
• VAT paid on purchases
• Can be claimed back
• Reduces VAT liability

Example:

• Purchase: R500
• VAT (15%): R75
• Total: R575
• Input VAT claimable: R75

Net VAT Payable

Calculation:

• Output VAT - Input VAT
• If positive: Pay to SARS
• If negative: Refund from SARS
• Net amount due

Example:

• Output VAT: R1,500
• Input VAT: R1,200
• Net VAT: R300 (pay to SARS)

Common VAT Scenarios

Scenario 1: New Business

Situation:

• Starting new business
• Expect turnover over R1 million
• Need to register

Action:

• Register before starting
• Or within 21 days of exceeding threshold
• Complete registration process
• Begin charging VAT

Scenario 2: Growing Business

Situation:

• Business growing
• Approaching R1 million threshold
• Considering registration

Action:

• Monitor turnover closely
• Register before exceeding threshold
• Or register voluntarily
• Plan for VAT compliance

Scenario 3: Existing Business

Situation:

• Already registered
• Ongoing compliance
• Regular returns

Action:

• Maintain compliance
• File returns on time
• Pay VAT due
• Keep records

VAT Compliance

Best Practices

Accurate Records:

• Keep detailed records
• Maintain invoices
• Track VAT calculations
• Organize documentation

Timely Filing:

• File returns on time
• Pay VAT by deadline
• Avoid penalties
• Maintain compliance

Regular Review:

• Review VAT position regularly
• Check calculations
• Verify compliance
• Address issues early

Common Mistakes

Errors to Avoid:

• Late filing
• Incorrect calculations
• Missing returns
• Poor record keeping
• Not charging VAT when required

Penalties and Interest

Late Filing Penalties

Penalty Structure:

• Fixed penalty for late filing
• Additional penalties for non-compliance
• Interest on outstanding amounts
• Escalating penalties

Avoiding Penalties:

• File on time
• Pay on time
• Maintain compliance
• Keep records

Interest Charges

Interest Calculation:

• Charged on late payments
• Based on outstanding amount
• Compounded
• Can be significant

Frequently Asked Questions

When must I register for VAT?

You must register within 21 days of your annual turnover exceeding R1 million in any 12-month period.

Can I register for VAT voluntarily?

Yes, you can register voluntarily if your turnover is below R1 million, subject to SARS approval.

What is the VAT rate in South Africa?

The standard VAT rate is 15% for most goods and services. Some items are zero-rated (0%) or exempt.

How often must I submit VAT returns?

Usually bi-monthly, but may be monthly or annually depending on your turnover and category.

Can I claim VAT on all purchases?

You can claim input VAT on purchases used for making taxable supplies. Some purchases may not qualify.

What happens if I don't register when required?

You may face penalties, interest, and back-dated VAT liability. Register immediately if you've exceeded the threshold.

Can I deregister from VAT?

Yes, if your turnover falls below the threshold and you meet certain conditions, you can apply to deregister.

Conclusion

VAT registration is an important obligation for businesses in South Africa that meet the turnover threshold. Understanding registration requirements, the registration process, and ongoing compliance obligations is essential for business success. By registering on time, maintaining accurate records, filing returns promptly, and paying VAT due, you can ensure VAT compliance and avoid penalties.

For complex situations or if you're unsure about VAT obligations, consider consulting a qualified tax practitioner or accountant.

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Related Articles:

• How to Register for SARS eFiling (2026)
• SARS Penalties Explained (2026)
• How to Submit Your Tax Return (2026 Guide)

Official Resources:

• SARS eFiling
• SARS Website
• SARS Call Centre