What is VAT in South Africa?
Value Added Tax (VAT) in South Africa is a consumption tax levied at 15% on most goods and services. It is governed by the Value-Added Tax Act 89 of 1991 and administered by SARS.
South Africa introduced VAT in 1991 (replacing GST), and the rate increased from 14% to 15% in April 2018.
When Must You Register for VAT?
Compulsory VAT Registration:
Your business must register for VAT when:
- •Annual taxable turnover exceeds R1 million in the previous 12 months, OR
- •It is reasonably expected to exceed R1 million in the next 12 months
Voluntary VAT Registration:
You may voluntarily register for VAT if your taxable turnover is:
- •At least R50,000 in the past 12 months, OR
- •You have signed contracts proving future supplies above R50,000
Why register voluntarily?
- •Claim back VAT paid on business expenses (input tax)
- •Appear more credible to large corporate clients who require VAT invoices
- •Offset VAT on capital purchases like equipment
VAT Registration Requirements
To register for VAT, you need:
- •✅ CIPC company registration documents
- •✅ SARS income tax registration number
- •✅ Valid company bank account statements (3 months)
- •✅ Proof of business trading activities
- •✅ Director/representative ID and details
- •✅ Proof of business address
How to Register for VAT with SARS
Online (Recommended):
- Log in to efiling.sars.gov.za
- Go to "Registration, Amendment & Verification"
- Click "Register New" and select "VAT"
- Complete the VAT101 application form
- Upload supporting documents
- SARS may require a branch visit for verification
Processing takes 5–21 working days.
VAT Returns: How Often Must You Submit?
| Category | Filing Frequency |
|---|
|---|---|
| Turnover above R30 million | Monthly |
|---|---|
| Most businesses | Bi-monthly (every 2 months) |
| Qualifying small businesses | 6-monthly (Category F) |
VAT returns are filed via SARS eFiling and payment is due on the last business day of the month following the VAT period.
VAT Penalties for Non-Compliance
SARS imposes significant penalties:
- •Late registration: 10% of VAT payable
- •Late returns: Minimum R250 per month
- •Understatement: Up to 200% of underpaid VAT
- •Tax evasion: Criminal prosecution
Zero-Rated vs Exempt Supplies in South Africa
Not all products attract 15% VAT:
Zero-Rated (0% VAT):
- •Basic food items (bread, rice, milk, eggs, vegetables)
- •Petrol and diesel
- •Exports of goods
- •International transport
Exempt Supplies (no VAT):
- •Residential accommodation (long-term)
- •Educational services
- •Financial services
- •Healthcare services
Get VAT-Registered with Amashad
Amashad's tax specialists handle the complete VAT registration process, from document preparation to SARS submission and follow-up. Request a quote today.