From 1 April 2026 the VAT registration thresholds went up, so fewer small businesses have to register. Here is when you must register, when you may, and what changes once you do.
When registration is compulsory
You must register for VAT once your taxable supplies in any 12-month period exceed R2.3 million, or when you sign a contract that will take you over R2.3 million in the next 12 months. Before 1 April 2026 the threshold was R1 million.
You must apply within 21 business days of crossing the threshold. Taxable supplies are everything you sell that is not VAT exempt, including zero-rated sales.
When you may register voluntarily
You can choose to register once your taxable supplies in the past 12 months have exceeded R120 000, up from R50 000. SARS also accepts some newer businesses on the strength of contracts or expenses.
Registering voluntarily can make sense if your customers are VAT registered businesses, because they claim the VAT back, and you can then claim VAT on your own costs.
What changes once you are registered
- You add 15% VAT to your prices and issue valid tax invoices
- You file a VAT201 return every two months, or monthly once your turnover is over R30 million
- You pay VAT on eFiling by the last business day of the month after your period ends
- You can claim the VAT on your business expenses, with valid tax invoices
- Your books need to be kept up to date, because SARS checks VAT refunds closely
Already registered and under R2.3 million?
Some businesses registered under the old R1 million threshold now fall below the new one. Deregistering is possible but has costs: you may have to pay output VAT on the assets you hold. Work through the numbers before you apply.
General information, correct as at the date above. It is not tax advice for your situation. Plumbline is a fictional firm on a CodeLab One concept website.