When must I register for VAT in South Africa?

Compulsory registration is required when taxable supplies in any rolling 12-month period exceed R2.3 million (raised from R1m in the 2026 Budget, effective 1 April 2026), or when a written contract guarantees you will exceed it in the next 12 months.

What is the voluntary VAT registration threshold?

You may register voluntarily once taxable supplies exceed R120,000 in a rolling 12-month period (raised from R50,000 in the 2026 Budget).

How long do I have to register after exceeding the threshold?

You must register within 21 days of the date the threshold was exceeded, using form VAT101.

Can I deregister from VAT?

Yes, if turnover drops below R2.3m for 12 straight months. SARS will, however, demand output VAT on the market value of any assets still held on which you previously claimed input VAT.

Do I need to register for VAT? · invoicebook.co.za

The short version

You must register for VAT if your taxable supplies for any rolling 12-month period exceed R2.3 million. You may register voluntarily once they've exceeded R120,000 in a rolling 12 months. Both thresholds were raised in the 2026 Budget (previously R1 million and R50,000) and apply from 1 April 2026.

Compulsory: the R2.3m test

Two versions of the test apply, and failing either triggers compulsory registration:

Retrospective: your taxable supplies have exceeded R2.3m in the past 12 months.
Prospective: there's a written contract or obligation that will push your taxable supplies above R2.3m in the next 12 months.

You have 21 days from the date the threshold is exceeded to register with SARS, using form VAT101. Miss the window and SARS can still backdate your registration and claim output VAT from you on everything supplied in the interim — a nasty surprise that happens more often than people expect.

Voluntary: the R120k option

If your taxable supplies pass R120,000 in a 12-month period, you can register voluntarily. Some businesses want to — mostly because it lets them claim input VAT back on expenses and purchases. A consulting firm buying a R30,000 laptop can reclaim roughly R4,000 of VAT; a registered business spending R500,000 on stock reclaims R75,000. That's real cash.

Voluntary registration also signals scale to B2B customers — some corporates simply won't engage with a non-VAT-vendor supplier because their own reconciliation gets messy.

When voluntary registration hurts

If your customers are individual consumers (B2C), adding 15% to your prices either squeezes your margin or alienates price-sensitive buyers — unlike B2B customers, consumers can't claim the VAT back. A hair salon, freelance graphic designer, or small retailer often does better outside the VAT net until compulsory registration forces them in.

What counts as "taxable supplies"

Gross receipts from supplying goods or services, excluding exempt supplies (education, residential rentals, financial services). Dividends received, interest earned, and capital disposals of fixed assets generally don't count. When in doubt, the VAT Act's narrow definition of "enterprise" is the test.

Once you're registered

File VAT201 bi-monthly (or monthly if turnover > R30m). Add 15% to every invoice, claim input VAT on allowable expenses, pay the difference to SARS by the 25th of the following month. eFiling payments get an extension to the last business day. The VAT calculator does the arithmetic on any single invoice.

Deregistering is harder than registering

If turnover drops below R2.3m for 12 straight months you can deregister, but SARS will likely demand output VAT on the market value of any assets you're still holding (stock, equipment) because registration meant you claimed input VAT on them. Voluntary registration is a one-way door in practice — weigh it carefully.