VAT Registration Threshold 2026 in South Africa

What changed from 1 April 2026

SARS Budget 2026 guidance says the compulsory VAT registration threshold increased from R1 million to R2.3 million from 1 April 2026. The voluntary VAT registration threshold increased from R50 000 to R120 000, subject to exceptions and final legal requirements.

Compulsory registration check

A business should check taxable supplies over a rolling 12-month period and whether it is reasonably expected to exceed the threshold. If compulsory registration applies, SARS guidance says the application must be made within the required period after the threshold is exceeded or expected to be exceeded.

Voluntary registration check

Voluntary VAT registration may be possible below the compulsory threshold where the business meets the SARS requirements. Registering voluntarily can help with input tax in some cases, but it also creates VAT201 filing, invoicing, pricing and recordkeeping duties.

Examples to think through

• Annual taxable supplies of R900 000: usually below the compulsory threshold, but voluntary registration may still need review.
• Annual taxable supplies of R2.2 million: close to the new compulsory threshold, so monthly monitoring matters.
• Annual taxable supplies of R2.5 million: above the new compulsory threshold, so VAT registration should be reviewed urgently.

Records to keep

Keep sales reports, invoices, bank records, contracts, credit notes and calculations showing which supplies are taxable, zero-rated, exempt or outside the VAT calculation. Threshold checks are only useful if the underlying records are reliable.

Sources to verify

Primary SARS references: SARS Value-Added Tax, Budget 2026 VAT threshold FAQ, and SARS register for VAT guidance.