How to register for VAT in South Africa

The thresholds moved on 1 April 2026, for the first time since 2009, and most of what is written about registering for VAT in South Africa still quotes the old ones.

From 1 April 2026 the compulsory VAT registration threshold is R2.3 million, up from R1 million, and the voluntary threshold is R120,000, up from R50,000. Both had stood since 2009. If you are reading a guide, a template or an accountant's blog post that says R1 million, it has not been updated.

	Until 31 March 2026	From 1 April 2026
Compulsory registration	R1 million	R2.3 million
Voluntary registration	R50,000	R120,000

The practical effect is that a lot of businesses that were about to become VAT vendors are no longer required to, and a lot that already are no longer have to be. Both of those are decisions rather than automatic outcomes, and the rest of this article is about how to take them.

There are two ways to become a VAT vendor in South Africa. One is compulsory and arrives whether you wanted it or not, once your turnover passes the threshold. The other is voluntary, available a long way below it, and genuinely good for some businesses and genuinely bad for others.

Most guides treat voluntary registration as an upgrade. It is not. It is a trade: you get to claim the VAT on what you buy, and in exchange you add 15% to what you sell and file a return every two months for as long as you are registered. Which side of that trade you land on depends almost entirely on who your customers are.

When registration is compulsory

Registration becomes compulsory once the value of your taxable supplies exceeds R2.3 million in any consecutive twelve-month period. Note what that is not: it is not your financial year, and it is not a forecast. It is any rolling twelve months, which means a good December can push you over on figures going back to the previous January.

It is also compulsory, before you have earned anything, if you have signed a written contract that obliges you to make taxable supplies of more than R2.3 million in the following twelve months. A single large contract can therefore make you liable on the day you sign it.

Once you are liable you have a limited window to apply, currently 21 business days from the date you exceeded the threshold. The clock starts at the point you crossed it, not the point you noticed.

What counts towards the R2.3 million

Only taxable supplies count, and the figure is measured excluding VAT. Taxable supplies means everything you supply that the VAT Act taxes, including supplies taxed at 0%. Zero-rated sales count towards the threshold even though they carry no VAT. Several things are left out:

Exempt supplies are excluded. They are not taxable supplies at all.
Sales of capital assets are excluded. Selling a delivery vehicle does not push you towards registration.
Supplies made because the business is closing, or is being permanently and substantially reduced in size, are excluded.
Abnormal supplies of a temporary nature are excluded, which is the provision that stops one freak contract from misrepresenting the size of an enterprise.

The distinction between zero-rated, exempt and out of scope is the one that trips people up here, because all three produce no VAT and only one of them counts towards the threshold. We set the three out side by side in the field-by-field VAT201 guide.

Voluntary registration, and when it is a bad idea

You may apply voluntarily once your taxable supplies have exceeded R120,000 in the past twelve months. There are limited provisions for registering below that, and they come with conditions. Whether you should is a commercial question, and the honest answer runs both ways.

Register voluntarily when	Leave it when
Your customers are VAT vendors. They claim your VAT back, so your price does not effectively rise and a VAT number removes a procurement objection.	You sell to the public. Your price either rises 15% against unregistered competitors or the 15% comes out of your margin.
You are buying stock, equipment or premises carrying VAT. That input tax becomes recoverable instead of a cost.	Your costs carry little VAT. Salaries, most bank charges and exempt costs give you nothing to claim.
You export, so your sales are zero-rated while your local costs are not. That is a structural refund position.	You cannot reliably keep valid tax invoices for what you buy. Without them the input tax is not claimable.
You are close to R2.3 million and would rather choose your effective date than have one imposed.	Nobody in the business has the time to file every two months, and it will be filed late.

What SARS asks for

Applications go in on the RAV01 registration form through eFiling, and SARS may follow up with a request for supporting documents or an appointment. Registration is not instant and it is not automatic. What the application turns on is proof that a real enterprise exists at a real address, and that the turnover you have claimed is genuine.

Get the entity's own details straight first. For a company, the CIPC registration documents and the income tax number. For a sole trader, your own income tax registration. SARS will not register a VAT vendor whose underlying tax affairs are not in order.
Open a bank account in the name of the business. SARS verifies the account and the name on it against the applicant. A personal account standing behind a registered company is a common reason for an application to stall.
Assemble proof of the taxable supplies you are relying on. Invoices and bank statements covering the twelve months, showing the turnover that took you over R120,000 or R2.3 million. This is the part applicants underestimate.
Have proof of the business address ready, along with certified identity documents for the representative taxpayer, the person SARS will hold responsible for the entity's tax affairs.
Submit the RAV01 on eFiling, then answer any verification request promptly. Anything outstanding stops the clock on the application, not on your liability.

Two choices you make at registration and live with afterwards

Registration is not only a number. Two settings come with it, and both are much harder to change later than to get right now.

Your category decides how often you file. Most small businesses land in Category A or Category B, which are both two-monthly and differ only in which months they end. Category A ends in the odd months, Category B in the even ones. Which one you get is SARS's allocation rather than a preference, and it is shown against your registration on eFiling.

Your basis decides when a transaction counts. On the invoice basis, the default, you declare output VAT when you issue an invoice, whether or not you have been paid. On the payments basis, available to smaller vendors on application, VAT follows the cash instead. The invoice basis is the one most vendors are on, and it has a cash flow consequence worth understanding before your first return: VAT on an invoice your customer has not paid is still payable to SARS.

A tax invoice generated by OxyAccounting, showing the Tax Invoice heading, the supplier's name, address and VAT registration number, the customer's details including their VAT number, an invoice number and date, line descriptions with quantities and unit prices, and a separate subtotal, VAT and total block. — What every sales document has to look like from your effective date: the words **Tax Invoice**, your VAT registration number, your customer's, a serial number and date, and the value, the VAT and the total set out separately. Demo company data.

Switching basis once you are trading is not a settings change. Transactions straddling the switch would otherwise be counted twice or not at all, so it needs a one-time change-of-basis adjustment under the VAT Act. That is a conversation with your accountant.

What changes on your effective date

Your effective date, not the date your certificate arrives, is the date from which you are a vendor. Five things change on it.

Every standard-rated supply carries 15%, and the price you quoted last week either absorbs it or has to be revised. Decide which before the date, not after the first invoice.
Every sales document becomes a tax invoice, with the words, your VAT registration number and your customer's where they are registered, a serial number, the date, a description, and the value and the tax shown separately. It must be issued within 21 days of the supply.
Input tax needs a valid tax invoice from the supplier. A card slip, a bank statement line or a supplier statement is not one, and the VAT on it is not claimable however genuine the purchase.
You file every period, including nil ones. A period with no trade still needs a return, and a late return attracts penalties and interest on its own account.
The VAT you collect is not yours. It is money you are holding for SARS between now and the due date, and the most common cash flow failure among newly registered vendors is spending it.

You are already registered and now under the threshold

This is the position the increase has put most existing small vendors in, and it is the question the change actually raises. Being under the new threshold does not deregister you. You stay a vendor, with every obligation you had last month, until SARS cancels the registration.

A vendor whose taxable supplies fall below the new compulsory threshold may apply to deregister. SARS has also said it will notify vendors who fall below the new voluntary threshold that it intends to cancel their registration, once the legislation is promulgated. So there are two different situations: between R120,000 and R2.3 million the choice is yours, and below R120,000 the decision may be taken for you.

Staying registered is a perfectly reasonable answer. The reasons to stay are the same ones that make voluntary registration worth having: you keep claiming input VAT, you keep the VAT number your corporate customers ask for, and nothing about your invoicing changes. The reason to leave is the two-monthly return and the record-keeping behind it.

One thing not to do is to stop filing. Until the cancellation is effective, a period with no trade is still a return, and an unfiled one still attracts penalties.

Where OxyAccounting fits

The product does not register you. Registration is between you and SARS, and nothing on this site submits anything to SARS on your behalf. What it does is carry the consequences of registration in the books: VAT switched on with your registration number and effective date, the category and the basis set once, the periods generated from them, tax invoices that carry the statutory content in every layout, and a VAT201 built against the real SARS form so the figures you file reconcile to your ledger.

That last part is the one worth checking before your first return. The field-by-field walk-through is in how to complete a VAT201 return, and the manual page on preparing a VAT201 covers it screen by screen. All of it is in the single R149/month plan, along with the double-entry ledger underneath. There is no VAT tier. The 14-day free trial needs no card.

Frequently asked questions

Yes. From 1 April 2026 the compulsory VAT registration threshold increased from R1 million to R2.3 million, and the voluntary registration threshold from R50,000 to R120,000. Both had been unchanged since 2009, which is why most guides and templates still quote the old figures. Confirm the current position on the SARS website.

Registration is compulsory once the value of your taxable supplies exceeds R2.3 million in any consecutive twelve-month period, the figure that applies from 1 April 2026, and you then have a limited window, currently 21 business days, to apply. It is also compulsory if you have signed a written contract obliging you to make taxable supplies of more than R2.3 million in the following twelve months. Confirm the current threshold and window with SARS or your accountant.

Yes, once your taxable supplies have exceeded R120,000 in the past twelve months, the figure that applies from 1 April 2026, with limited provisions for registering below that under conditions. Whether you should is commercial rather than legal: it helps if your customers are VAT vendors or your costs carry a lot of VAT, and it hurts if you sell to the public, because your price either rises 15% or the 15% comes out of your margin.

Taxable supplies, measured excluding VAT, including supplies taxed at 0%. Exempt supplies do not count, nor do sales of capital assets, supplies made because the business is closing or being substantially reduced, or abnormal supplies of a temporary nature. It is measured over any consecutive twelve months, not over your financial year.

In broad terms: the entity's registration and income tax details, a bank account in the name of the business, proof of the business address, certified identity documents for the representative taxpayer, and proof of the taxable supplies you are relying on, meaning invoices and bank statements covering the twelve months. SARS changes the list and may ask for verification, so check the current requirements on the SARS website before you apply.

No. Until your registration is effective you may not add VAT to an invoice or head a document Tax Invoice. Issue an ordinary invoice with no VAT line until the effective date. Charging tax you are not registered to collect is an offence, and your customer cannot claim it in any case.

It varies, and it depends far more on your supporting documents than on SARS. An application with a bank account in the entity's name, a verifiable business address and clean proof of turnover moves; one missing any of those stops until it is supplied. Your liability to register is not paused while the application is outstanding, so apply as soon as you are liable.

A vendor whose taxable supplies fall below the new compulsory threshold may apply to deregister, and SARS has said it will notify vendors falling below the new R120,000 voluntary threshold that it intends to cancel their registration once the legislation is promulgated. Being under the threshold does not deregister you on its own: you remain a vendor, and must keep filing, until the cancellation is effective. Weigh it up first, because the VAT Act treats assets still in the business at deregistration as supplied, which can create a VAT liability on the way out.

Possibly. The VAT Act allows a deduction in defined circumstances for tax on goods acquired before registration that you still hold at the effective date and will use to make taxable supplies. It is conditional and it requires the original valid tax invoices, so keep them and ask your accountant to look at your opening stock and equipment.