When and how to register for VAT in South Africa

Everything sole traders and small business owners need to know about the VAT registration threshold, voluntary registration, and the SARS eFiling process.

The compulsory registration threshold: R1 million

Under the Value-Added Tax Act, 1991, you are required to register for VAT if your total taxable supplies exceed R1 million in any 12-month period. This is a rolling 12 months, not just the tax year. If you cross R1 million at any point, you must register within 21 business days of crossing the threshold.

Important:Failing to register once you cross the threshold is a SARS compliance offence and can result in penalties and back-dated VAT liability. If you think you're approaching R1 million, consult a tax practitioner before you get there.

"Taxable supplies" includes both standard-rated (15%) and zero-rated (0%) supplies. Exempt supplies (such as residential rental) do not count towards the threshold.

Voluntary registration: registering before R1 million

You can register for VAT voluntarily if your taxable supplies exceed R50 000 in the past 12 months or are reasonably expected to do so in the next 12 months. Below R50 000, voluntary registration is not available.

Why would you register voluntarily? The main reason is to claim input VAT: the VAT you pay on your own business expenses. If your suppliers are VAT-registered and you spend a significant amount on VATable business costs (equipment, software, professional services), registering for VAT can reduce your effective costs.

The trade-off: once you're VAT-registered, you must:

→Charge VAT at 15% on all your standard-rated supplies and remit it to SARS.
→File VAT returns on a regular basis (typically bi-monthly for smaller vendors).
→Issue valid tax invoices (titled "TAX INVOICE") for all supplies, see our VAT invoice guide.
→Keep proper VAT records for at least 5 years.

For many sole traders selling primarily to consumers (not businesses), the admin burden of VAT registration outweighs the input tax benefit below R1 million. If most of your clients are businesses that can claim input VAT, the calculus shifts: your prices effectively become the same to them whether or not you charge VAT.

How to register for VAT via SARS eFiling

VAT registration in South Africa is done through SARS eFiling. If you're not already registered on eFiling, you'll need to do that first.

Go to efiling.sars.gov.za and log in, or register if you don't have an account yet.

Complete the VAT101 form

Navigate to "Home" → "SARS Registered Details" → "Maintain Registered Details" → "Register for new Tax Types". Select VAT and complete the VAT101 form. You'll need your business bank account details, business address, and information about your taxable supplies.

Submit supporting documents

SARS may request supporting documents, typically a certified copy of your ID, proof of address, bank statement, and proof of business activity (contracts, invoices, or a business registration document).

Await your VAT number

SARS processes VAT registration applications within 21 business days. Once approved, you'll receive a 10-digit VAT registration number beginning with "4".

Update your invoices

Once registered, all your invoices for taxable supplies must be titled "TAX INVOICE" and include your VAT number and the VAT amount. Issue a corrected invoice for any taxable supply made after your effective registration date.

What changes once you're VAT-registered

Once your VAT registration is active, several things change in how you operate:

→Your prices: You now charge 15% VAT on top of your existing rates (or restructure your pricing to include it). Communicate this clearly to existing clients.
→Your invoices: All invoices must now be titled "TAX INVOICE" and include your VAT number, the VAT amount per line, and total VAT.
→Your filing: You must submit VAT201 returns to SARS on a regular basis (typically every 2 months). The return shows output VAT (what you collected) minus input VAT (what you paid), with the difference paid to SARS or refunded to you.
→Your records: You must keep all tax invoices (both issued and received) for at least 5 years. SARS can audit your VAT records at any point in that window.

Should you register voluntarily?

This depends on your specific situation. As a rough guide:

Consider registering if…

→ Most of your clients are VAT-registered businesses
→ You have significant VATable business expenses
→ You're approaching R1m and want to get compliant early
→ VAT registration signals professionalism in your market

May not be worth it if…

→ Most of your clients are private individuals (can't claim input VAT)
→ Your business expenses are low
→ You're not confident managing the filing obligations
→ You're well below R1m with no near-term growth

If you're unsure, a registered tax practitioner can run the numbers for your specific situation. The cost of a consultation is usually worth it before making this decision.

Already VAT-registered? Create compliant invoices instantly.

Add your VAT number to SortedNexus and your invoices automatically switch to "TAX INVOICE", calculate VAT at 15%, and format everything to SARS requirements.

Create a free invoice →

Sources

Disclaimer: This guide is for general information only and reflects SARS rules as understood at the time of writing. Tax legislation changes, so always verify current thresholds, forms, and procedures at sars.gov.za or consult a registered tax practitioner. The R1 million threshold and R50 000 minimum for voluntary registration are current as of the 2025/2026 tax year. Confirm these figures before making registration decisions.