VAT registration in South Africa: do you need to register? 2026 thresholds
You must register for VAT in South Africa once your taxable supplies pass R2.3 million in any consecutive 12 months, or are likely to. Below that, registration is voluntary and only open if you meet SARS's conditions, including more than R120,000 in supplies. SARS has applied both new figures since 1 April 2026.
On this page: VAT thresholds · compulsory registration · voluntary registration · should you register? · turnover tax · after you register · questions
VAT thresholds in 2026
| Taxable supplies in 12 months | Position |
|---|---|
| Over R2.3 million (or likely to be) | Registration is compulsory |
| R120,000 to R2.3 million | Voluntary, if you meet SARS's conditions |
| Under R120,000 | Generally not eligible for voluntary registration |
These replace the old R1 million and R50,000 figures. SARS's Budget 2026 FAQ gives the new thresholds from 1 April 2026 but adds that the amendments had not yet been promulgated and are subject to Parliament's legislative process. In practice SARS is processing registrations on the higher figures, but because the law was still catching up, confirm the current position before relying on a number.
"Taxable supplies" means the value of what you sell that is subject to VAT (including zero-rated sales), not your profit and not the cash in your bank.
Compulsory registration: over R2.3 million
Per SARS's registration page, you must register if your taxable supplies in any consecutive 12-month period exceeded, or are likely to exceed, R2.3 million. That is a rolling window, not a calendar or financial year. It also applies if a written contract commits you to supplies above R2.3 million over 12 months.
- Deadline: SARS says you must apply within 21 business days from the date the R2.3 million is, or will be, exceeded.
- Backdating: through eFiling, a compulsory registration can be backdated by up to 6 months from the date the threshold was exceeded. Older dates need a SARS branch visit with supporting documents.
- The cost of being late: if you should have been registered and were not, you may be liable for VAT on your sales from the date you should have registered, including VAT you never charged your clients. Ask your accountant how that applies to you before you let it slide.
Watch the trend, not just the total. A business growing past R190,000 a month is on course for R2.3 million within a year.
Voluntary registration: R120,000 to R2.3 million
Being above R120,000 does not automatically let you register. SARS's page sets conditions. Below the compulsory threshold, voluntary registration applies where you meet its tests, which include:
- supplies over R120,000 in the past 12 months, with a monthly average above R4,200 (if you have traded for fewer than 12 months, the months you have traded must average above R4,200);
- or written contracts or expenditure above R120,000 in the 12 months after you apply;
- and the general requirements SARS sets for the kind of business you run.
Voluntary registrations cannot be backdated. SARS notes that its regulation had not yet been updated for the R120,000 figure but that it is applying the increased threshold from 1 April 2026.
Should you register early? How to decide
Reasons to register voluntarily
- You can claim input VAT. If you buy stock, tools or materials from VAT-registered suppliers, you can claim back the VAT you pay on them.
- Some clients require it. Larger corporate and government customers often will not onboard a supplier without a VAT number.
- You will cross R2.3 million soon anyway. Registering a little early avoids a scramble and a late-registration problem.
Reasons to wait
- Your prices effectively rise. A client who cannot claim VAT back, such as a household or an unregistered small business, pays 15% more once you charge it. Absorbing the VAT instead cuts your margin by roughly 13% of the price.
- More admin, immediately. VAT returns on SARS's schedule (many small vendors file every two months), careful records, and invoices that meet the tax invoice rules.
- It is harder to undo than to delay. Cancelling a registration needs an application to SARS.
A worked example
Sipho runs a plumbing business that bills R60,000 a month (R720,000 a year) and spends R12,000 a month on materials from VAT-registered suppliers. If he registered, VAT on materials would be R12,000 × 15 ÷ 115 ≈ R1,565 a month to claim back, about R18,800 a year. But 80% of his customers are households who cannot claim VAT. If he keeps his prices and treats them as VAT-inclusive, he owes R60,000 × 15 ÷ 115 ≈ R7,826 a month in output VAT, so the net cost is about R6,260 a month. If he adds VAT on top instead, his households pay 15% more and some would go elsewhere. Unless a key client demands a VAT number, waiting is the better call, and the decision should be revisited as turnover grows. Your numbers will differ, so run them with the VAT calculator.
The alternative: turnover tax
Turnover tax is a separate, simpler system for small businesses, and a business can be on both it and VAT. Per SARS's Budget 2026 FAQ, the turnover limit is R2.3 million from 1 April 2026, with 0% tax on the first R600,000 of turnover. Registration is optional, and some businesses are excluded, including personal service providers, labour brokers, and businesses where over 20% of receipts come from professional services or investment income. Ask your accountant whether it suits you.
After you register
Every invoice you issue must carry your VAT number and show the VAT, and sales above R5,000 need a full tax invoice with the client's details. Use the free invoice template or the invoice generator to get the fields right. Quotes should show whether prices include VAT, which the quote generator handles.
Questions people ask
At what turnover must I register for VAT in South Africa?
When your taxable supplies in any consecutive 12-month period exceed, or are likely to exceed, R2.3 million. SARS says you must apply within 21 business days of that point.
Can I register for VAT voluntarily?
Yes, if you meet SARS's conditions. These include more than R120,000 in taxable supplies in the past 12 months with a monthly average above R4,200, or contracts or expenditure above R120,000 in the next 12 months. Voluntary registrations cannot be backdated.
Did the VAT threshold change in 2026?
SARS says the compulsory threshold rose from R1 million to R2.3 million and the voluntary threshold from R50,000 to R120,000, applied from 1 April 2026. SARS also notes that the legislation had not yet been promulgated, so confirm the current position with SARS or your accountant.
What happens if I register late?
You may be liable for VAT on your sales from the date you should have registered, even for VAT you did not charge clients. A compulsory registration can be backdated by up to 6 months through eFiling. Speak to your accountant if you think you are already over the threshold.
Should I register for VAT if my clients are mostly individuals?
Often not until you have to. Individuals cannot claim VAT back, so charging it raises your price by 15%. Registration makes more sense when most clients are VAT-registered businesses, or you spend a lot on VAT-registered suppliers.
Zuvo handles VAT correctly either way
Flip VAT registration on in your profile once, and every quote and invoice Zuvo drafts applies it correctly from then on.
Try Zuvo free for 7 days, no cardGeneral guidance based on SARS's published registration rules and its Budget 2026 FAQ, checked on 20 October 2026. Not a substitute for advice from your own accountant or tax practitioner on whether and when to register for your specific business.