VAT vendor registration in South Africa
When you must register for VAT with SARS, when you may register voluntarily, and what changes on your invoices once you are a vendor.
A VAT vendor is a business registered for VAT with SARS. Registration is compulsory when your taxable supplies exceed R1 million in a 12-month period. You may apply for voluntary registration if your taxable supplies exceed R50,000 but not R1 million. Registration gives you a 10-digit VAT number that starts with 4, and SARS assigns a tax period category that decides how often you file a VAT201 return. Once registered, you charge VAT on taxable supplies and issue tax invoices that meet section 20 of the VAT Act. This page explains the thresholds and what changes on your invoices. 4invoices does not register you, does not check VAT numbers with SARS and does not file returns.
- Compulsory registration: taxable supplies above R1 million in 12 months.
- Voluntary registration: taxable supplies above R50,000 but not above R1 million.
- VAT numbers have 10 digits and start with 4.
- Registration is done with SARS, not through your invoicing software.
How it works
Work out whether you must register. Add up your taxable supplies over the last 12 months and look at the next 12 months. If they exceed R1 million you must register. Exempt supplies do not count toward the threshold.
Decide on voluntary registration. Below R1 million you may register if you exceed R50,000. It lets you claim input tax on business purchases, but you must then charge VAT, file returns and keep records.
Register with SARS. You apply to SARS, and SARS sets your effective date, issues your VAT number and assigns your tax period category. Use the SARS website for the current process and documents.
Update your invoice details. Show your VAT number on every tax invoice, and charge the right rate on each line: standard 15%, zero-rated 0%, or no VAT on exempt supplies.
Record your customers' details. For a full tax invoice you show the recipient's name and address, and their VAT number where they are a vendor. Keep these on your customer records.
Legal references
- Value-Added Tax Act 89 of 1991, section 23 - compulsory and voluntary registration.
- Value-Added Tax Act 89 of 1991, section 20 - tax invoice content.
- SARS VAT 404 Guide for Vendors - registration thresholds and record-keeping.
Frequently asked questions
What is the VAT registration threshold in South Africa?
Registration is compulsory when taxable supplies exceed R1 million in a 12-month period. Voluntary registration is available if they exceed R50,000 but not R1 million. Confirm the current figures on the SARS website before you decide.
What does a South African VAT number look like?
It has 10 digits and starts with 4. SARS issues it when you register.
Do I need the customer's VAT number on every invoice?
On a full tax invoice you show the recipient's VAT number where the recipient is a vendor. An abridged tax invoice, which may be used for supplies below R5,000, does not need the recipient's details. See the tax invoice page for the full lists.
Does 4invoices check a VAT number with SARS or register me?
No. 4invoices does not register you, does not verify VAT numbers with SARS and does not file returns. You type the VAT numbers you want on the invoice. It creates the invoice with the tax rate on each line and a PDF download.