Few things confuse South African business owners more than VAT registration ❓

Some rush to register far too early. Others ignore it until SARS sends a letter that ruins their week. And almost everyone has heard a different “rule” at a braai 🍖

So let’s settle it properly: when do you have to register for VAT, when can you, and when is it actually a smart move?

🚨 The compulsory threshold: R2.3 million (new for 2026)

Here’s the rule that matters most — and it changed recently:

From 1 April 2026, you must register for VAT once your taxable turnover exceeds (or is reasonably expected to exceed) R2.3 million in any consecutive 12-month period.

That’s a big jump. For 17 years the threshold sat at R1 million, so this is the first increase in a generation, and it lifts a lot of smaller businesses out of the compulsory net entirely 🎉

Two crucial details people miss:

📅 It’s any rolling 12 months, not your financial year. So you must watch your trailing 12-month turnover continuously, not just at year-end. 🔮 It’s also forward-looking, if you sign a contract that will clearly push you over R2.3 million in the next 12 months, the obligation can kick in based on that expectation.

Cross the threshold and fail to register, and SARS can register you anyway, backdated, and hold you liable for VAT you never charged. That’s a brutal, business-threatening surprise 😬

📉 The voluntary threshold: R120,000 (also new)

You don’t have to wait for R2.3 million. You may register voluntarily once your taxable turnover exceeds R120,000 in the past 12 months. It is up from the old R50,000 level, also from 1 April 2026.

Why would anyone volunteer to collect tax for SARS? Sometimes it genuinely makes sense 👇

❓ I’m already VAT-registered but now below R2.3 million — should I deregister?

This is the big question of 2026, and the answer is: deregistration is optional, not automatic. If your turnover sits between R1 million and R2.3 million, you’re no longer compelled to be registered — but you can choose to stay.

Stay registered if: ✅ Most of your customers are VAT-registered businesses (they don’t care about the 15% — they claim it back) ✅ You claim meaningful input VAT on stock, equipment or services ✅ Being VAT-registered matters for credibility with larger clients

Consider deregistering if: ❌ Your customers are mainly the public, and dropping VAT effectively cuts your prices 15% ❌ The bi-monthly VAT201 admin outweighs the benefit ❌ You have little input VAT to claim

⚠️ One caution: deregistering can trigger “exit VAT” on assets you still hold, so it’s not always free to walk away. Run the numbers with your accountant before deciding.

❓ Should I register for VAT voluntarily?

It depends on who your customers are and what you buy:

✅ Register voluntarily if:

  • Most of your customers are themselves VAT-registered businesses (they claim the VAT back, so your prices stay competitive)
  • You have significant input VAT to claim — buying lots of stock, equipment or services
  • You want the credibility of being VAT-registered (some larger clients prefer it)

❌ Think twice if:

  • Your customers are mainly the public/end-consumers (adding 15% VAT makes you 15% more expensive overnight 💸)
  • Your input costs are low (little VAT to claim back)
  • You’re not ready for the admin — VAT means bi-monthly VAT201 returns, strict record-keeping and real deadlines

VAT registration is a commitment, not just a status. Go in with eyes open 👀

❓ How do I register for VAT?

Registration is done through SARS, typically via eFiling, and you’ll need:

📋 Your business registration details and tax number.

🏦 Business bank account details.

🧾 Proof of trading and turnover (invoices, contracts, bank statements showing you’ve met the threshold).

📑 Supporting documents SARS requests to verify you’re a genuine, active business.

SARS has tightened VAT registration considerably. This is to fight fraud, so expect verification, and don’t be surprised by a request for extra proof. Clean documentation gets you through faster 📂

❓ What happens after I’m registered?

Welcome to the VAT vendor club — here are your ongoing duties:

🧾 Charge 15% VAT on your taxable supplies (output VAT).

📥 Claim back VAT on qualifying business purchases (input VAT).

📅 Submit VAT201 returns (usually every two months) and pay over the difference.

🗂️ Keep valid tax invoices for everything, SARS is strict about what qualifies.

⏰ Never miss a deadline, VAT penalties and interest stack up fast, and late VAT is a common trigger for a SARS audit.

Honestly, VAT is where good cloud accounting software earns its keep — proper systems calculate your VAT201 automatically and keep your invoices compliant.

🎯 Don’t guess your way through VAT

VAT registration sits at an awkward intersection. Register too early and you hurt your prices; register too late and SARS comes knocking with a backdated bill. Getting the timing and the voluntary-vs-compulsory call right is genuinely worth a conversation.

The team at Go2 Accounting helps South African businesses decide when and whether to register, handles the registration and verification, and takes the bi-monthly VAT201 admin off your plate entirely.

Because VAT done right is invisible — and VAT done wrong is unforgettable 😉