If you wish to become VAT-registered with SARS as a South African business, you will need to apply for a VAT number. Many businesses opt to voluntarily register for VAT once their business turnover reaches the right threshold. Others will choose to wait until they reach the compulsory threshold before they register. No matter which applies to you, it is an easy process and can be done online through SARS eFiling
How To Apply For A VAT Number In South Africa
Your VAT number will be issued to your business by SARS once your application for VAT registration is received and processed. While they will sometimes take a while to analyze and vet your application, this is often received almost instantly through the system. To expedite the process as much as possible, be sure to fill in your VAT registration form carefully and in full detail and supply all asked-for supporting documents. Should you receive an additional request for further proof, respond to it promptly. This will help to speed the process up as much as possible.
You can find SARS’s guide on VAT registration at that link for full details of how to apply for a VAT number in South Africa. To summarize, however, you should:
- Establish whether you are eligible for compulsory or voluntary registration. This means making the voluntary R50,000 in annual turnover or reaching the mandatory R1,000,000 in turnover. Do remember that these are amounts in any consecutive 12-month period and are not tied to your tax year or any other specific date.
- Then complete the VAT101 form via eFiling
- Add your business registration documents, the ID of the registered representative, proof of the company’s bank account, and physical/postal addresses where you are asked for them. You will also need the linked tax number of the business. These should be all the supporting documents you need, but SARS can ask for others if they feel they are needed. Watch out for communication on the matter.
- Ensure your other tax types are fully compliant, or registration cannot take place.
SARS will process your application and issue you a Notice of Registration (VAT certificate) and VAT number once it is accepted.
How Much Is VAT Registration In South Africa?
You can register for VAT yourself for free through SARS and the eFiling system. While they discourage people from using SARS branches when you can do the task online, it is also possible to head into a SARS branch for extra assistance with VAT registration if you need to.
While manually registering for VAT yourself will require a little time and some basic financial understanding, the form is pretty intuitive and self-explanatory, and this will allow you to register for VAT without having to pay any money at all.
Why, then, is there a perception that you pay to register for VAT in South Africa? This is mostly because there are ‘fast-track’ companies that offer to do this for you. However, you would be better served by asking your tax practitioner or accountant to handle the matter for you if you do not want to do it yourself. They will charge admin fees, of course, but they are also fully aware of the intricacies of your tax matters and already have the information to hand- and it may even be cheaper than these online ‘out-the-box’ services.
What Are The Requirements For VAT Registration?
The major requirement for VAT registration in South Africa is meeting the voluntary or mandatory income thresholds as follows:
- Voluntary VAT registration requires a taxable income turnover of R50,000 in a consecutive 12-month period. You will have to continue to meet this benchmark to stay VAT-registered.
- Compulsory VAT registration occurs when you make a taxable income turnover of R1,000,000 in a consecutive 12-month period. At this point, you are required to register for VAT regardless.
To register for VAT, your other tax types must be fully compliant, too.
What Is The Difference Between Tax Number And VAT Number?
Every business and natural person earning a taxable income in South Africa is required to have an income tax number, often just called a tax number. This is your primary identifier with SARS, as income tax is the most common tax category you pay. However, as businesses register for other tax types, such as VAT or even PAYE/UIF, SARS will often issue other unique identifying numbers specifically for these tax types. This helps streamline and sort payment and administrative matters. Make sure to use the correct number for the type of tax you are paying, especially as the generated payment reference number is linked to these.
Applying for a VAT number in South Africa is reasonably easy, especially with the eFiling system to help you get it done online.
What Is Exempt VAT?
Think of the goods and services that are exempt from VAT as the unique items in a bazaar that don’t carry the usual market tax, or VAT.
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