VAT registration thresholds in South Africa (from 1 April 2026)
The compulsory threshold rose from R1 million to R2.3 million and the voluntary threshold from R50 000 to R120 000. Here is how the thresholds work, according to SARS.
The current thresholds
Compulsory registration: taxable supplies of more than R2.3 million in any consecutive 12-month period.
Voluntary registration: possible, under certain circumstances, once taxable supplies have exceeded R120 000 in the past 12 months.
The Minister of Finance announced the increases in the Budget Speech on 25 February 2026, with effect from 1 April 2026. Before that the thresholds were R1 million (compulsory) and R50 000 (voluntary) (SARS: Value-Added Tax (opens in new tab)). SARS's Budget 2026 FAQs (opens in new tab) note that although the amendments had not yet been promulgated, SARS is administering new VAT registration applications on the increased thresholds from 1 April 2026.
Who must register
According to the SARS Register for VAT page (opens in new tab), registration is compulsory when:
- the value of taxable supplies made in any consecutive 12-month period has exceeded, or is likely to exceed, R2.3 million; or
- under a written contractual obligation, the value of taxable supplies to be made in a 12-month period will exceed R2.3 million.
The application must be made within 21 business days from the date the R2.3 million is or will be exceeded.
Two points are easy to miss. First, the test is any consecutive 12-month period, not your financial year, so check a rolling 12 months. Second, the threshold looks at the value of taxable supplies, which includes zero-rated supplies but excludes exempt supplies. See zero-rated vs exempt supplies.
Non-resident suppliers of certain electronic services are also liable for compulsory registration, at the end of the month in which their taxable supplies exceed R2.3 million (SARS: Register for VAT).
Voluntary registration
A person whose taxable supplies are below R2.3 million may choose to register if, under certain circumstances, taxable supplies have exceeded R120 000 in the past 12 months. SARS also accepts voluntary applications from certain persons before the R120 000 has been reached, including municipalities, welfare organisations, a person acquiring a business as a going concern, and persons who meet the conditions in the Voluntary Registration Regulation or who carry on listed activities such as agriculture, mining or property development.
SARS's page sets out the Regulation's tests, for example where taxable supplies have been made for one month preceding the application, that month's value must have exceeded R4 200; or where the average monthly taxable supplies in the preceding months (minimum 2, maximum 11) exceeded R4 200. Written contracts, expenditure and finance agreements showing more than R120 000 in the following 12 months can also qualify. SARS notes that the Regulation itself had not yet been updated but that it is administering applications on the increased threshold.
Should you register voluntarily?
Registration lets you claim input tax on business costs and may suit you if most of your customers are VAT vendors who can claim back the VAT you charge. In exchange you must charge VAT, issue tax invoices, file returns and keep records. The freelancers and small businesses guide covers those obligations.
What is not an "enterprise"
You can only register if you carry on an enterprise. SARS lists examples of activities that are not an enterprise, including:
- making exempt supplies (such as financial services, residential accommodation and public transport);
- working as an employee earning a salary or wage (a non-executive director is treated as an independent contractor, not an employee);
- hobbies and private recreational pursuits;
- private occasional sales, such as household goods or a private car; and
- supplying "commercial accommodation" where the total value does not exceed R120 000 in any consecutive 12 months.
Liability date and backdating
For voluntary registrations, the VAT liability date is set by the date of application and backdating is generally not allowed without supporting documents. For compulsory registrations, eFiling allows backdating of up to 6 months from the date the threshold was exceeded; beyond that, SARS asks you to make a branch appointment with supporting documents. The liability date may not be more than 3 months in the future (SARS: Register for VAT).
How to register
SARS accepts VAT registration applications through eFiling or a virtual appointment booked on its eBooking system. Submit the correct supporting documents with your application to avoid delays; SARS may request outstanding documents and can reject applications if they are not provided in time. Where no risk is identified, SARS can issue a VAT number immediately. The step-by-step eFiling process is on the Register for VAT page (opens in new tab).
Falling below the new threshold
SARS's Budget 2026 FAQs say vendors falling below the new compulsory threshold may apply to deregister. When a registration is cancelled, the person must account for "exit VAT" on certain goods and rights retained, such as trading stock and assets on which input tax was claimed, using the lesser of cost or open market value. Take advice before deregistering.
Once registered, use the SA VAT Calculator to add 15% VAT to your prices or to work out the VAT inside an inclusive amount.
Sources
All checked on 10 October 2026.