Value-Added Tax (VAT) is charged at 15% on most goods and services in South Africa. Whether your business must charge it depends on its turnover.
Compulsory registration
You must register for VAT if your taxable turnover exceeded R1 million in any consecutive 12-month period, or if you reasonably expect it to exceed R1 million in the next 12 months. You must apply within 21 days of reaching that point.
Voluntary registration
If your turnover is below R1 million but above R50,000 over a 12-month period, you can register voluntarily. This can make sense if you supply to VAT-registered businesses and want to claim back the VAT on your own costs. It also adds admin: you must charge VAT, issue compliant tax invoices and file regular returns.
What changes once you're registered
- You charge 15% VAT on your taxable sales (output tax).
- You can claim back VAT on business purchases (input tax) if you hold valid tax invoices.
- You file VAT201 returns, usually every two months, and pay over the difference.
- Your invoices must meet SARS's tax invoice requirements.
Pricing with VAT
Be clear whether a price includes or excludes VAT. Our free VAT calculator converts between the two in seconds.
Next steps
If you're close to the threshold, plan ahead rather than registering in a hurry. Our team can review your turnover and handle the registration and returns, so get in touch for advice that fits your situation. Thresholds and rules can change, so always confirm the current requirements with SARS.