One of the most common questions from growing South African businesses is: "Do I have to register for VAT?" The short answer depends on your turnover — but the decision has real consequences either way.
The R1 million rule (compulsory)
You must register for VAT once your taxable turnover exceeds R1 million in any consecutive 12-month period — or if you have a contract that will clearly take you over R1 million in the next 12 months. This isn't optional, and registering late can mean SARS charges you for the VAT you should have collected.
Voluntary registration (from R50,000)
You can register voluntarily once your taxable turnover passes R50,000 in a 12-month period. Businesses do this when:
- Their customers are mostly VAT-registered (who don't mind the 15%, and it looks more established), or
- They have large input VAT to claim back (e.g. buying equipment or stock).
The upside of being VAT-registered
- You can claim back input VAT on your business purchases.
- It can make you look more established to bigger clients.
The downside
- You must add 15% to your prices, which can make you more expensive to non-VAT customers (like the general public).
- You take on admin: charging VAT correctly, keeping records, and filing a VAT201 every two months (see our guide, VAT201 explained).
What changes once you register
From your registration date you charge 15% VAT on taxable sales, issue tax invoices with your VAT number, keep records for five years, and submit VAT201 returns. Missing a return or paying late brings penalties and interest.
Quick VAT maths
Need to add or extract VAT from a figure? Use our free VAT Calculator.
Once you're registered, the ongoing admin is where most businesses slip up. 360books charges VAT correctly on every invoice, tracks input vs output VAT, separates standard, zero-rated and exempt supplies, and builds your VAT201 automatically — so registration doesn't become a paperwork headache.