VAT Registration

What is VAT?
VAT stands for Value Added Tax and is an indirect consumption tax levied on goods and services in the economy. It is collected by the vendor (you) on behalf of SARS.

When do I need to register for VAT?
It is compulsory to register for VAT once your turnover has breached R1m in any 12 month consecutive period. You can voluntarily register for VAT but only if you have sales of more than R50,000. For the voluntary VAT registration, a minimum of three invoices which total more than R50,000 are required and these amounts must be reflected in your business bank account.

Can I charge VAT if I am not registered?
No! That is fraudulent as VAT is collected behalf of the government and needs to be paid over to SARS.

How much is VAT?
Currently VAT is levied at 15% of the good and services supplied by the VAT vendor.

Is my Tax Registration Number also my VAT number?
No, Your Tax number is your income tax registration number and different from a VAT registration number which needs to be applied for.

My supplier says I need to be VAT registered but I don’t have the turnover. What now?
Your supplier is misunderstanding how VAT works. They can claim the VAT back from SARS if you are VAT registered. However, you would need to add VAT to current prices thereby increases them 15%. So your supplier is getting the same price without the hassle of claiming the VAT back. They are effectively seeing your price and wanting a 15% discount.