VAT registration in South Africa after the 2026 threshold change

What SARS has said, and what to check before you act

In the 2026 Budget the compulsory registration threshold was announced at R2.3 million and the voluntary threshold at R120 000, both effective 1 April 2026. SARS’s own FAQ says it is administering new registration applications on that compulsory threshold from 1 April 2026, and that vendors under the new compulsory line may apply to deregister.

The same FAQ noted that the amendments had been announced and were being administered while still subject to Parliament’s legislative process. That is why a careful firm does not treat a blog, including this one, as the statute. Before you register or cancel, open the current SARS page and confirm the threshold still in force.

Who must register

You look at the value of taxable supplies, not at “profit” and not at money that merely passes through. If you have already gone over the compulsory threshold, or you have a written contract that will take you over it, registration is a legal obligation, not a branding choice. Certain exceptions exist. A person who previously crossed the old R1 million line and never registered can still be backdated, with penalties and interest. SARS points those cases toward the Voluntary Disclosure Programme rather than quiet hope.

Who may register, and who might leave

Between R120 000 and R2.3 million, registration is generally a choice. Customers who are vendors often prefer your invoices to carry VAT. You, in turn, can claim input tax on qualifying costs. If your customers are households, charging 15% can simply make you more expensive, and the admin is every tax period for the rest of the vendor’s life.

If you are already registered and your taxable supplies are under R2.3 million but over R120 000, SARS has said the registration is not cancelled automatically. You may apply to cancel. If you fall under the voluntary threshold, SARS may notify you of an intention to cancel. You can object, on the ADR1, within the time the notice gives you.

The deemed exit VAT people discover too late

When registration is cancelled you cease to be a vendor, and you must account for VAT on certain goods and rights you keep: trading stock and enterprise assets on which input tax was claimed, generally at the lower of cost or open market value. Motor cars and entertainment where input tax was denied, and goods that cost you nothing, are treated differently.

That output tax goes on the final VAT 201. SARS has said it can be paid in six equal monthly instalments. Run the number before you chase a cancellation because a customer “does not mind”. Also keep charging VAT until the Commissioner tells you the final tax period. Stopping early creates a mess that is harder than the return you were trying to escape.

A decision we can make with you

Bring the last twelve months of sales, the next twelve if you already know them, a list of assets, and whether your customers ask for VAT invoices. We will tell you if the compulsory test is met, and if it is not, whether staying registered still pays. That is the VAT service. The return itself then becomes part of the monthly close.