SARS VAT in South Africa 2026 — Complete Guide to Registration, 15% Rate, Input Tax & VAT201
VAT is levied at 15% on the supply of taxable goods and services by registered vendors in South Africa, under the Value-Added Tax Act 89 of 1991. From 1 April 2026, the compulsory VAT registration threshold increased from R1 million to R2.3 million — the first increase since 2009. This guide covers when you must register, how VAT works, what you can claim back, and how to file your VAT201 return.
JUMP TO:
What is VAT?
Do I need to register?
How to register
Output & input tax
Zero-rated & exempt
VAT periods & deadlines
VAT201 guide
Refunds
Common errors
FAQ
What is VAT and how does it work?
VAT is a tax on the value added at each stage of a supply chain. Registered vendors charge VAT on sales (output tax), deduct VAT paid on business purchases (input tax), and pay the difference to SARS — or claim a refund if input exceeds output.
Legislation: Value-Added Tax Act 89 of 1991 | Source: SARS — sars.gov.za/types-of-tax/value-added-tax/
Legislation: Value-Added Tax Act 89 of 1991 | Source: SARS — sars.gov.za/types-of-tax/value-added-tax/
1
Charge VAT on sales
→ output tax (15% on standard-rated supplies)
2
Pay VAT on purchases
→ input tax (VAT on qualifying business expenses)
3
Pay difference to SARS
via VAT201 (or claim refund if input > output)
Worked Example
Printer buys paper
R1,000 + R150 VAT → input tax R150
Printer sells output
R2,000 + R300 VAT → output tax R300
VAT payable to SARS
R300 − R150 = R150
Key point: VAT is borne by the final consumer. Businesses collect it for SARS and reclaim input VAT on their own purchases — so they don't bear the cost themselves.
Do you need to register for VAT?
| Registration type | Taxable supplies threshold | Obligation |
|---|---|---|
| Compulsory | Exceed R2.3 million in any rolling 12-month period, OR expected to exceed R2.3 million in the next 12 months | Must register within 21 business days |
| Voluntary | Exceed R120,000 but below R2.3 million in any 12-month period | May apply to register |
| Not eligible | Below R120,000 | Cannot register (subject to limited exceptions) |
Source: SARS — sars.gov.za/types-of-tax/value-added-tax/register-for-vat/ (updated April 2026); SARS Budget 2026 FAQ
Effective 1 April 2026. Previous thresholds: compulsory R1 million / voluntary R50,000.
Effective 1 April 2026. Previous thresholds: compulsory R1 million / voluntary R50,000.
The R2.3 million threshold is the first increase since 2009. If your turnover has historically exceeded R1 million but is now below R2.3 million, you may be eligible to deregister — but read the deregistration implications carefully first, as this triggers a deemed supply of business assets.
Source: SARS Tax Practitioner Connect Issue 69, February 2026 — sars.gov.za
Source: SARS Tax Practitioner Connect Issue 69, February 2026 — sars.gov.za
What counts as "taxable supplies"?
Standard-rated (15%) and zero-rated (0%) supplies both count toward the threshold. Exempt supplies do NOT count.
Standard-rated (15%) and zero-rated (0%) supplies both count toward the threshold. Exempt supplies do NOT count.
The rolling 12-month test:
The threshold applies to any consecutive 12-month period — not your financial year. Monitor your rolling 12-month total continuously.
The threshold applies to any consecutive 12-month period — not your financial year. Monitor your rolling 12-month total continuously.
Should you register voluntarily?
| Reasons to register voluntarily | Trade-offs |
|---|---|
| Claim input VAT back on business purchases | Must charge 15% VAT on all standard-rated supplies |
| Issue tax invoices — preferred supplier to other VAT vendors | Must file VAT201 returns bi-monthly |
| Level playing field when competing for B2B contracts | Must keep compliant records for 5 years |
| Refund claimants attract closer SARS verification |
Source: Global Law Experts (May 2026); SARS
How to register for VAT →
How to register for VAT
Two registration routes:
Route 1 — SARS eFiling (preferred):
- Log in at sarsefiling.co.za
- Navigate to: Home → Maintain SARS Registered Details (RAV01) → Add VAT
- Complete and submit the VAT registration form
Route 2 — VAT101 form at a SARS branch:
- Complete the VAT101 (Application for Registration as a Vendor)
- Submit at a SARS branch (appointment required)
- Forms available at sars.gov.za or any SARS branch
21-business-day deadline:
If you have already exceeded R2.3 million in taxable supplies, you must apply within 21 business days of the date the threshold was exceeded or the date you became aware it would be exceeded.
Source: SARS — sars.gov.za/types-of-tax/value-added-tax/register-for-vat/
If you have already exceeded R2.3 million in taxable supplies, you must apply within 21 business days of the date the threshold was exceeded or the date you became aware it would be exceeded.
Source: SARS — sars.gov.za/types-of-tax/value-added-tax/register-for-vat/
Backdating:
You can backdate your VAT registration by up to 6 months via eFiling (RAV01). Backdating beyond 6 months requires supporting documents and SARS approval.
Source: SARS — same page
You can backdate your VAT registration by up to 6 months via eFiling (RAV01). Backdating beyond 6 months requires supporting documents and SARS approval.
Source: SARS — same page
After registration, SARS assigns:
- Your VAT vendor number
- Your VAT period category (A, B, C, or D — see Section 7)
New Dec 2025 From 8 December 2025, SARS issues customised rejection notices with specific reasons if your VAT registration application is declined — making resubmission faster and clearer.
Source: SARS — sars.gov.za/types-of-tax/value-added-tax/ (December 2025 announcement)
Output tax and input tax — what you charge and what you claim
Output tax
Charge 15% on all standard-rated supplies. This is collected from customers and remitted to SARS.
Output tax = 15% × value of standard-rated supplies in the period
Input tax
Deduct VAT paid on business purchases used to make taxable supplies.
What you CAN claim input VAT on:
- Stock, raw materials, and goods purchased for taxable supply
- Capital equipment used in your business
- Business services (legal, accounting, IT, marketing)
What you CANNOT claim input VAT on (blocked input tax):
- Entertainment — client lunches, functions, restaurants, events (blocked regardless of business purpose)
- Passenger vehicles (motor cars) — purchase or lease of cars; only commercial vehicles qualify
- Personal expenses
- Inputs used to make exempt supplies
Source: SARS — VAT Act 89 of 1991; VAT404 Guide for Vendors
Output tax (VAT collected on sales)
MINUS Input tax (VAT paid on purchases)
= Net VAT position
Positive → you pay SARS
Negative → SARS refunds you
Apportionment — mixed taxable and exempt supplies:
If your business makes both taxable AND exempt supplies, you can only claim input VAT proportional to the taxable portion. Incorrect apportionment is one of the most common SARS audit triggers.
Source: SARS VAT Act principles; Procompare.co.za citing SARS
If your business makes both taxable AND exempt supplies, you can only claim input VAT proportional to the taxable portion. Incorrect apportionment is one of the most common SARS audit triggers.
Source: SARS VAT Act principles; Procompare.co.za citing SARS
Zero-rated and exempt supplies — the key difference
Zero-rated (0% VAT)
- VAT charged at 0%
- Still a taxable supply
- Issue a tax invoice
- CAN claim input VAT on related purchases
Exempt (no VAT)
- No VAT at all
- Outside the VAT system
- No tax invoice for the VAT
- CANNOT claim input VAT on related purchases
Source: VAT Act 89 of 1991, Sections 11 (zero-rated) and 12 (exempt)
Zero-rated supplies (Section 11 — key examples)
| Category | Examples |
|---|---|
| Basic foodstuffs | Brown bread, maize meal, samp, milk, fresh fruit and vegetables, eggs, dried beans, rice, vegetable oil, pilchards/canned fish |
| Exports | Goods physically exported from SA (direct/indirect — documentation required) |
| International services | Services supplied to non-residents and consumed outside SA |
| Fuel levy goods | Petrol, diesel |
| Going concern | Sale of an operating business between two VAT vendors |
| IP to non-residents | Royalties, licensing, IP transferred to persons outside SA |
Full list: Schedule 2, Part B of the VAT Act 89 of 1991. Source: SARS VAT404 Guide for Vendors
Exempt supplies (Section 12 — key examples)
| Category | Examples |
|---|---|
| Financial services | Bank charges, interest, insurance premiums, financial transactions |
| Residential rental | Letting a dwelling for residential purposes (commercial property = standard-rated) |
| Public road/rail transport | Local taxis, buses, trains |
| Educational services | Supplied by SARS-approved educational institutions |
| Childcare | Crèches and pre-schools (approved) |
Source: VAT Act 89 of 1991, Section 12
Mixed supplies example:
A landlord lets out residential flats (exempt) and a ground-floor commercial shop (standard-rated). She charges 15% VAT on the shop rent only. She cannot charge VAT on the residential units — and must apportion her input VAT claims between the two activities.
A landlord lets out residential flats (exempt) and a ground-floor commercial shop (standard-rated). She charges 15% VAT on the shop rent only. She cannot charge VAT on the residential units — and must apportion her input VAT claims between the two activities.
VAT periods and filing deadlines
VAT period categories (assigned by SARS on registration):
| Category | Frequency | Who it applies to | Period end months |
|---|---|---|---|
| A | Bi-monthly | Most vendors | Feb, Apr, Jun, Aug, Oct, Dec |
| B | Bi-monthly | Most vendors | Jan, Mar, May, Jul, Sep, Nov |
| C | Monthly | Taxable supplies > R30 million/year | Every month |
| D | Every 6 months | Farming enterprises, turnover ≤ R1.5 million | 6-monthly |
SARS assigns your category on registration. You cannot self-select Category C or D.
Source: SARS — sars.gov.za/types-of-tax/value-added-tax/farming/
Source: SARS — sars.gov.za/types-of-tax/value-added-tax/farming/
VAT201 deadline:
| Filing method | Deadline |
|---|---|
| eFiling (preferred) | Last business day of the month following the VAT period |
| Manual / branch | 25th of the month following the VAT period |
Example: Category A vendor, period ending 28 February 2027 → eFiling deadline: last business day of March 2027.
Source: SARS VAT404 Guide for Vendors
Source: SARS VAT404 Guide for Vendors
Late filing penalty:
10% of outstanding VAT is levied immediately the day after the deadline. Interest at the prescribed rate is also charged.
Source: SARS VAT404 Guide
10% of outstanding VAT is levied immediately the day after the deadline. Interest at the prescribed rate is also charged.
Source: SARS VAT404 Guide
How to file your VAT201 return on SARS eFiling
Before you log in — prepare:
- Total standard-rated sales and output VAT
- Total zero-rated sales
- Total exempt supplies
- Total input VAT on business purchases (with valid tax invoices on file)
-
1
Log into eFiling
Navigate to: Returns → VAT → VAT201
-
2
Select the correct VAT period
Choose the relevant period from the dropdown.
-
3
Enter output tax
Declare standard-rated, zero-rated, and exempt supplies in the correct fields.
-
4
Enter input tax
Declare capital goods and other goods/services separately.
-
5
Review the "Calculation" section
eFiling automatically calculates net VAT payable or refundable.
-
6
Submit
If you owe VAT: pay using the Payment Reference Number (PRN) before the deadline. If in a refund position: SARS processes after verification.
Valid tax invoice requirement:
You can only claim input VAT if you hold a valid tax invoice for the purchase. A valid tax invoice must contain:
You can only claim input VAT if you hold a valid tax invoice for the purchase. A valid tax invoice must contain:
- Supplier name and VAT number
- The words "Tax Invoice"
- Invoice date
- Description of goods or services
- VAT amount separately stated
VAT refunds — when SARS owes you
A VAT refund arises when input tax exceeds output tax for a period. Common causes:
- New business with high startup capital expenditure before significant sales
- Exporters (zero-rated output; standard-rated inputs)
- High-stock-purchase periods
How SARS processes refunds:
The refund is first offset against any outstanding tax debt. If no debt, SARS pays it directly into your nominated bank account.
Verification:
SARS may verify your return before releasing a refund — particularly for voluntary registrants, large refunds, and new vendors. Prepare all supporting tax invoices and financial records before submitting a return in a refund position.
Source: SARS VAT404 Guide; Global Law Experts (May 2026)
SARS may verify your return before releasing a refund — particularly for voluntary registrants, large refunds, and new vendors. Prepare all supporting tax invoices and financial records before submitting a return in a refund position.
Source: SARS VAT404 Guide; Global Law Experts (May 2026)
Common VAT errors and how to avoid them
Error
Claiming input VAT on entertainment and motor cars
Claiming back VAT on client lunches, functions, or passenger vehicle purchases/leases.
Fix: Remove these from all input VAT claims. They are blocked by the VAT Act — no exception applies.
Error
Filing without a valid tax invoice
Claiming input VAT without holding a compliant tax invoice.
Fix: Collect and file all tax invoices before the VAT201 deadline. No invoice = no claim.
Error
Issuing non-compliant tax invoices
Charging VAT without including all required tax invoice fields (missing VAT number, no separate VAT amount).
Fix: Use accounting software that generates SARS-compliant invoices automatically.
Error
Confusing zero-rated with exempt
Treating exempt supplies as zero-rated (or vice versa) on the VAT201.
Fix: Use the table in Section 6. Key rule: zero-rated = still taxable; exempt = outside VAT system.
Error
Incorrect apportionment
Claiming 100% input VAT when some business activities are exempt.
Fix: Calculate and apply the apportionment ratio every VAT period. Document the methodology.
Error
Missing the VAT201 deadline
Late submission or payment.
Fix: Calendar alert for the last business day of each month following a VAT period end. 10% penalty is immediate.Source: SARS VAT404 Guide; SA Accounting Network
Frequently Asked Questions
The standard VAT rate is 15%, levied on the supply of taxable goods and services by registered vendors. A proposed increase to 15.5% (May 2025) and then to 16% (April 2026) was reversed before taking effect — the rate has remained 15% since 1 April 2018.
From 1 April 2026, the compulsory VAT registration threshold is R2.3 million in taxable supplies in any rolling 12-month period — increased from R1 million, which applied since 2009. The voluntary registration threshold is R120,000 (increased from R50,000).
Zero-rated supplies are taxable at 0% — vendors still issue tax invoices and can claim input VAT on related costs. Examples include basic foodstuffs and exports. Exempt supplies fall outside the VAT system — no VAT is charged and input VAT on related costs cannot be claimed. Examples include residential rental and financial services.
For eFiling vendors, the VAT201 and payment are due by the last business day of the month following the VAT period. For non-eFiling vendors, the deadline is the 25th. Most vendors are on a bi-monthly cycle (Category A or B).
No. Input VAT on entertainment — client functions, restaurant meals, events — is blocked under the VAT Act and cannot be claimed. Input VAT on passenger vehicles (motor cars) is similarly blocked, regardless of business use.
Register via SARS eFiling (RAV01 → Add VAT) or by submitting a VAT101 form at a SARS branch. If you have already exceeded R2.3 million in taxable supplies, you must register within 21 business days. Backdating by up to 6 months is available via eFiling.
A 10% penalty on the outstanding VAT amount is levied immediately for late payment. Interest at the prescribed SARS rate is also charged on any outstanding balance.
No — VAT registration is not automatically cancelled. If your taxable supplies fall below R120,000, SARS will notify you of its intention to cancel your registration, and you can agree or contest. Cancellation triggers a deemed supply of business assets on hand — consider the VAT cost before agreeing to deregistration.
Related guides
Specific VAT scenarios
Essential tax guides
Calculators & forms
Sources and references
All VAT information on this page is sourced from, or verified against, the following official and authoritative references:
- Value-Added Tax Act 89 of 1991 — Primary legislation governing VAT
- SARS — Value-Added Tax — sars.gov.za/types-of-tax/value-added-tax/
- SARS — VAT Rates and Thresholds — sars.gov.za/tax-rates/other-taxes/
- SARS — Small Businesses and Taxpayers — sars.gov.za/businesses-and-employers/small-businesses-taxpayers/
This page was last reviewed in May 2026 by Solly Maanaso, CA(SA). Next review: after Budget Speech February 2027.