VAT Deregistration After the 2026 Threshold Change

Threshold change does not cancel registration automatically

From 1 April 2026, the compulsory VAT registration threshold increased to R2.3 million. That does not mean every existing VAT vendor below the threshold is automatically deregistered. SARS guidance says cancellation may happen by the Commissioner or on written request where requirements are met.

When cancellation may be possible

SARS says a vendor may apply for cancellation where taxable supplies will be less than the compulsory registration threshold in any consecutive 12-month period. Cancellation can also be relevant where the enterprise ceased, never commenced, or no longer meets registration requirements.

How to apply

SARS guidance refers to the VAT123e cancellation form for all enterprises and VAT123T for a separately registered enterprise. The application should explain the circumstances and be submitted through the official SARS route, including a branch or virtual appointment where required.

Keep filing until cancellation is final

A vendor must keep charging and accounting for VAT up to the final tax period advised by SARS. SARS also notes that cancellation cannot be finalised until outstanding VAT obligations and liabilities have been resolved or settled.

Exit VAT and final period checks

• Check whether output tax on assets or goods on hand must be declared.
• Resolve outstanding returns, payments and SARS queries.
• Keep the notice of cancellation and final tax period confirmation.
• Update invoices, pricing and accounting systems only when the effective date is clear.

Sources to verify

Primary SARS references: SARS cancellation of VAT registration and SARS Budget 2026 VAT threshold FAQ.