2026 VAT Update: From 1 April 2026, South Africa increased the VAT registration thresholds. Businesses may register voluntarily once taxable supplies exceed R120,000 in a 12-month period, while VAT registration becomes compulsory when turnover exceeds R2.3 million in any consecutive 12 months. These changes aim to reduce compliance pressure on small and growing businesses.

What is VAT?

VAT refers to value added tax paid on products. Output VAT is the tax on products sold and input VAT is the tax on products bought.

Compulsory registration

Compulsory registration (2026): you must register for VAT within 21 days of the end of the month in which your total taxable supplies exceeded R2.3 million in any consecutive 12-month period (threshold effective 1 April 2026).

Voluntary registration

Voluntary registration (2026): you may register voluntarily once your taxable supplies exceeded R120,000 in the past 12 months, or are likely to exceed R120,000 in the next 12 months.

For expected future turnover, SARS requires proof such as a written contract with a customer or signed orders showing the income pipeline.

Businesses that have spent more than R120,000 on taxable goods or services for the enterprise in the past 12 months (or will in the next 12 months) can also register voluntarily.

Another instance where a company can register for VAT is when a company enters into a finance agreement or credit agreement with a company that is registered under the NCR.

To read more, click here.

It is important to note that if you want to register for VAT, you will have to have proof that your business meets any of the requirements as mentioned above. The turnaround time for a VAT registration at SARS is 21 business days.

If you need professional assistance to register your company for VAT, click here.