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South Africa VAT guidelines

FACTSHEET
Country codeZA
Tax nameValue-Added Tax (VAT)
Tax AuthoritySouth African Revenue Service (SARS)

Overview​

South Africa levies Value-Added Tax under the Value-Added Tax Act 89 of 1991, administered by the South African Revenue Service (SARS). VAT is charged on the supply of goods and services by registered vendors and on imports. [1]

The standard rate is 15%. The increases announced in 2025 (to 15.5% from 1 May 2025 and 16% from 1 April 2026) were reversed by clause 13 of the Rates Bill introduced on 24 April 2025, and the Budget of 25 February 2026 did not change the rate. [1]

The single most consequential 2026 change is not the rate but the registration threshold: the compulsory threshold moves from R1 million to R2.3 million and the voluntary threshold from R50,000 to R120,000, both applied by SARS from 1 April 2026 — while the bill carrying them is still a draft published for public comment and has not been introduced in Parliament. See Registration thresholds for the exact legal position. [2]

VAT registration and the VAT number​

  • A person may only register for VAT if it carries on an "enterprise" as defined in the VAT Act — any activity carried on continuously or regularly in or partly in South Africa where goods or services are supplied for a consideration. The definition specifically includes intermediaries and non-resident suppliers of electronic services. [1]
  • An application for compulsory registration must be made within 21 business days from the date the R2.3 million threshold is or will be exceeded. [1]
  • Applications are made through eFiling or a virtual appointment via SARS eBooking. Where no risk is identified, SARS issues the VAT reference number immediately on application. Compulsory registrations can be backdated through eFiling (RAV01) by at most 6 months from the date the threshold was exceeded; anything longer requires a branch appointment with supporting documents. Voluntary registrations cannot be backdated without supporting justification. [1]
  • Non-resident electronic services suppliers do not use the ordinary channel: they email a completed VAT101 form with supporting documents to [email protected]. [2]

VAT number format and how it is verified​

A South African VAT registration number is a 10-digit number beginning with the digit 4. There is no alphabetic country prefix and SARS does not publish a checksum algorithm, so offline validation cannot go beyond the 10-digit/leading-4 pattern (regex ^4\d{9}$). The worked tax-invoice and credit-note examples in SARS's own VAT 404 Guide for Vendors use numbers of exactly this shape — 4321123450, 4291163592, 4111252081, 4740123987. [1]

Because the format carries no check digit, the only authoritative test is the SARS eFiling VAT Vendor Search, which is free, needs no login, and accepts either the VAT number or the trading name. Two practical cautions from SARS's own terms page: the database is updated weekly, so a newly registered vendor may not appear yet, and SARS disclaims responsibility for errors or omissions. [2]

For the step-by-step lookup, expected result fields and input-tax implications, see our How to verify a VAT number in South Africa guide.

Registration thresholds​

ThresholdAmount applied from 1 April 2026Previous amount
Compulsory — taxable supplies in any consecutive 12-month period (VAT Act s.23(1)(a))R2,300,000 [1]R1,000,000
Compulsory — non-resident electronic services suppliers and intermediaries (VAT Act s.23(1A))R2,300,000 [1] [7]R1,000,000
Voluntary — taxable supplies in the preceding 12 months (VAT Act s.23(3)(b))R120,000 [1]R50,000
Commercial accommodation — below this value the activity is not an "enterprise". Long-standing: unchanged since 1 April 2017, not part of the 2026 packageR120,000 [6]R60,000 (before 1 April 2017)

Compulsory registration is also triggered where, under a written contractual obligation, the value of taxable supplies to be made in a 12-month period will exceed R2.3 million. [1]

Source snapshot — SARS stating the compulsory threshold rises from R1 million to R2.3 million and the voluntary threshold from R50 000 to R120 000, effective 1 April 2026 Source snapshot captured 2026-07-28 — original

Legal status — read this before you act​

Be careful how you describe these figures. They are being applied, but are not yet enacted law:

  • The Minister of Finance announced the increase in the Budget Speech of 25 February 2026; SARS states "The compulsory registration threshold is increased from R1 million to R2.3 million. The voluntary registration threshold is increased from R50 000 to R120 000. The effective date for the increase is 1 April 2026." [1]
  • The amendment is clause 20 of the 2026 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill, which substitutes "R2,3 million" for "[R1 million]" in section 23(1)(a) and section 23(1A), and "R120 000" for "[R50 000]" in section 23(3)(b), and is expressed to be "deemed to have come into operation on 1 April 2026". Every page of that document is watermarked DRAFT. [2]
  • National Treasury and SARS were still inviting written public comment on the 2026 draft Rates Bill in a media statement issued on 4 June 2026, with comments due by close of business on 26 June 2026. [3]
  • SARS itself flags the position at the top of its Budget 2026 VAT FAQs: they are "issued based on the Minister's Budget announcement on 25 February 2026 and subject to Parliament's legislative process." [4]

Source snapshot — SARS Budget 2026 FAQ header stating the answers are subject to Parliament's legislative process Source snapshot captured 2026-07-28 — original

SARS has nonetheless already updated its operational artefacts: the Register for VAT page quotes R2.3 million and R120,000 throughout, and the VAT101 registration application form (version FV V2026.00.03) offers registration options tested against R120 000 rather than R50 000. [1] [5]

SARS's dedicated guide for foreign suppliers is the most explicit official statement of the electronic-services position: "Effective from 1 April 2026, the compulsory registration threshold, in section 23(1A) of the VAT Act, was increased to R2,3 million." [7]

If you now fall below the threshold​

Registration is not cancelled automatically when your taxable supplies sit between R120,000 and R2.3 million — you may choose to cancel, using a VAT123e form. Where taxable supplies in the preceding 12 months are below R120,000, SARS will notify you of its intention to cancel, and you have 80 business days to object on an ADR1 form. Cancellation triggers deemed exit VAT: output tax on trading stock and capital goods on hand, valued at the lesser of cost or open market value and declared in fields 1A and 4A of the final VAT201. The liability may be paid in six equal monthly instalments. [4]

Rates​

RateApplies to
15% (standard)Most taxable supplies of goods and services by registered vendors, including electronic services supplied by non-residents [1]
0% (zero-rated)Exports, and certain basic foodstuffs listed in Part B of Schedule 2 read with section 11(1)(j) — brown bread, dried mealies and mealie rice, brown bread flour (excluding wheaten bran), samp, hen's eggs, fresh vegetables and fruit, dried beans, lentils, maize meal, rice, pilchards in tins or cans, vegetable cooking oil (excluding olive oil), milk, cultured milk, milk powder and dairy powder blend, and edible legumes and pulses of leguminous plants [2]
ExemptListed in section 12 — certain financial services, rental of accommodation in a "dwelling" (including employee housing), certain educational services, services of employee organisations, certain sectional-title/share-block/old-age-scheme levy services, public road and railway transport of fare-paying passengers and their luggage, childcare in a crèche or after-school centre, and certain donated-goods supplies by an association not for gain. A person making only exempt supplies may not register and may not recover input tax [2]

Tax invoices. A full tax invoice is required where the consideration exceeds R5,000 (including tax); an abridged tax invoice may be issued below R5,000 except for a zero-rated supply; and no tax invoice is required where the consideration is less than R50. [2]

Filing and payment​

Vendors are allocated one of five tax-period categories: A and B (two-monthly, ending in alternating months), C (monthly — mandatory where taxable supplies exceed or are likely to exceed R30 million in any consecutive 12 months), D (six-monthly, mainly farming with taxable supplies under R1.5 million), and E (annual, for qualifying property-letting and management companies and trusts). [1]

A VAT201 return must be submitted, and payment made, on or before the 25th day of the month following the end of the tax period — or the last business day of that month where the return is filed and paid through eFiling or EFT. Where the 25th is not a business day, the deadline moves to the preceding business day. Records must be retained for 5 years. [2]

VAT on non-resident electronic services​

South Africa has taxed cross-border electronic services since 1 June 2014. The current regime rests on regulations issued under the definition of "electronic services" in section 1 of the VAT Act: [1]

  • Original Regulations — Government Notice R.221 in Government Gazette 37489 of 28 March 2014.
  • Updated Regulations — Government Notice 429 in Government Gazette 42316 of 18 March 2019, effective 1 April 2019. These substantially widened the scope so that essentially all services supplied for a consideration by means of an electronic agent, electronic communication or the internet are electronic services, subject to a few exceptions.
  • 2025 Regulations — Government Notice 5993 in Government Gazette 52293 of 14 March 2025, effective 1 April 2025, introducing the B2B exclusion described below.

Who has to register. A foreign supplier of electronic services is carrying on an enterprise in South Africa if the services are supplied from a place in an export country and any two of three circumstances are present — (1) the recipient is a resident of South Africa; (2) payment originates from a bank registered under the Banks Act 94 of 1990; (3) the recipient has a business, residential or postal address in South Africa. SARS calls this the "2 out of 3" test. A supplier that meets the test and exceeds the section 23(1A) threshold must register and account for VAT only on its electronic services supplied to South African customers; other supplies are ignored both for the threshold test and in the VAT return. [1]

What counts as electronic services. Examples given by SARS include distance-teaching programmes, educational webcasts, courses and webinars; content such as signals, writing, images, sounds or information transmitted by way of a telecommunications service; electronic games, interactive games and electronic betting or wagering; auction services; online advertising or the provision of advertising space; online shopping portals; and web-based broadcasting. The definition has no regard to the degree of human intervention involved. [1]

What is excluded. Telecommunications services; educational services supplied from an export country that are regulated by an education authority under the laws of that country; certain supplies between members of the same group of companies; and — from 1 April 2025 — supplies by a foreign supplier that makes supplies solely to VAT-registered vendors (the B2B exclusion). [1]

Operating obligations. The rate is the standard 15%. Registered foreign suppliers are generally placed on two-monthly Category A or B tax periods, moving to monthly Category C if taxable supplies exceed R30 million in any consecutive 12 months. Tax invoices must contain the particulars prescribed in VAT Notice 1594, published in Government Gazette 45624 on 10 December 2021, and a SARS Binding General Ruling on "Electronic Services" sets the minimum information required on a credit or debit note under section 21(5), the exchange rate to be used to express VAT in the currency of the Republic, and the manner in which prices must be advertised or quoted. Deregistration requests go to [email protected], and only where taxable supplies for the preceding 12 months are below the compulsory threshold and that situation is likely to continue. [1]

Note on the SARS electronic-services FAQ. SARS's FAQs: Supplies of Electronic Services is at Issue 4, dated 2 April 2025, and still quotes the old R1 million threshold throughout. The R2.3 million figure comes from the later Budget 2026 measure and SARS's updated Register for VAT page. Where the two conflict on the threshold, the newer SARS guidance and clause 20 of the 2026 draft Rates Bill are the current position. [1] [2]

E-invoicing status​

There is no mandatory B2B e-invoicing or clearance mandate in force in South Africa. What exists is an enabling framework and a voluntary system yet to be switched on.

The Tax Administration Laws Amendment Act 4 of 2026, published in Government Gazette 54447 on 1 April 2026, amends the VAT Act to: [1]

  • insert definitions into section 1 of "e-invoice" (a tax invoice that is issued, transmitted and received in a structured electronic format allowing its automatic and electronic processing, and that complies with such further requirements as the Minister may prescribe by regulation), "e-debit note", "e-credit note", "e-reporting" (electronically submitting tax data extracted from an e-invoice, e-debit note or e-credit note to SARS, to a supplier or its service provider, and to a recipient or its service provider, within the interoperability framework), and "interoperability framework" (a network of service providers where decentralised exchange of e-invoices, e-debit notes and e-credit notes occurs, and that can facilitate clearance and interoperability between supplier and recipient); and
  • insert section 74(1B), empowering the Minister to make regulations prescribing the requirements for participation by a vendor in a voluntary e-reporting system.

So the statutory vocabulary and the regulation-making power now exist, but the technical requirements, the interoperability framework and any onboarding dates all have to be prescribed by regulation, and participation as enacted is voluntary. Nothing in Act 4 of 2026 obliges a vendor to issue e-invoices.

Separately, SARS has published a Discussion Paper on Value-Added Tax Modernisation proposing that digital transmission of VAT data be implemented in phases, beginning with the segment of the vendor base contributing about 80% of total VAT revenue — monthly Category C vendors, Large Business and International vendors, vendors transacting with government (B2G), high-risk segments, and any vendor volunteering — with micro, small and medium vendors in later phases. The paper carries an explicit SARS disclaimer that it is for discussion and does not represent the official view of SARS or its Commissioner; treat it as direction of travel, not a timetable. [2]

Recent changes​

  • 2026-04-01 — SARS applies increased VAT registration thresholds: compulsory R1 million → R2.3 million (VAT Act s.23(1)(a) and, for non-resident electronic-services suppliers and intermediaries, s.23(1A)) and voluntary R50,000 → R120,000. Announced in the Budget on 25 February 2026 and carried in clause 20 of the 2026 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill; SARS notes the change is "subject to Parliament's legislative process". (South African Revenue Service) — see issue
  • 2026-04-01 — Tax Administration Laws Amendment Act 4 of 2026 (Government Gazette 54447) inserts e-invoice, e-debit note, e-credit note, e-reporting and interoperability-framework definitions into the VAT Act and gives the Minister power (s.74(1B)) to prescribe requirements for a voluntary e-reporting system. No mandatory e-invoicing obligation is created. (South African Revenue Service / National Treasury) — see issue
  • 2025-04-01 — The 2025 Regulations (Government Notice 5993, Government Gazette 52293 of 14 March 2025) introduce a B2B exclusion: supplies by a foreign supplier that supplies solely to VAT-registered vendors fall outside paragraph (b)(vi) of the "enterprise" definition and therefore outside the electronic-services registration requirement. (South African Revenue Service)

Frequently Asked Questions​

Has South Africa's compulsory VAT registration threshold really risen to R2.3 million, and is it law yet?​

SARS applies the new thresholds from 1 April 2026: compulsory registration once taxable supplies exceed R2.3 million in any consecutive 12-month period (up from R1 million), and voluntary registration from R120,000 (up from R50,000). [1]

The legal status is unusual and worth stating plainly. The increase was announced in the Budget on 25 February 2026 and is carried in clause 20 of the 2026 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill, which is expressed to be "deemed to have come into operation on 1 April 2026". [2] That Bill was still a draft out for public comment when National Treasury and SARS reissued it on 4 June 2026 with comments due 26 June 2026, [3] and SARS's Budget 2026 FAQs state they are "issued based on the Minister's Budget announcement on 25 February 2026 and subject to Parliament's legislative process." [4] In short: SARS is administering R2.3 million and R120,000 now; parliamentary passage of the Rates Bill is still outstanding.

I am a non-resident supplier of electronic services to South Africa — did my threshold move to R2.3 million too?​

Yes. Clause 20(1)(b) of the 2026 draft Rates Bill substitutes R2,3 million for R1 million in section 23(1A) of the VAT Act — the registration trigger for persons carrying on an enterprise under paragraph (b)(vi) and (vii) of the "enterprise" definition, i.e. non-resident electronic-services suppliers and intermediaries. [1] SARS's Register for VAT page now states that "Non-resident suppliers of certain electronic services are also liable for compulsory VAT registration at the end of the month in which the total value of taxable supplies exceeds R2.3 million." [2]

Source snapshot — SARS Register for VAT page stating non-resident electronic services suppliers must register once taxable supplies exceed R2.3 million Source snapshot captured 2026-07-28 — original

The proviso is unchanged: no liability arises where the threshold is exceeded solely as a consequence of abnormal circumstances of a temporary nature. [1] A supplier registered only because it passed R1 million may now sit below the compulsory threshold — but deregistration is not automatic, requires the position to be likely to continue, and triggers deemed exit VAT on assets on hand. [3]

Do I need a South African bank account to register as a foreign electronic services supplier?​

Generally no, but the rule tightened on 24 December 2024. A foreign electronic services supplier or non-resident intermediary is not required to open a South African bank account provided it is resident in a country with which South Africa has a double taxation agreement in force under the Income Tax Act, or a tax agreement under the VAT Act, and it either (a) is an external company under the Companies Act 71 of 2008 without a fixed or permanent place in South Africa, (b) is a natural person physically present in South Africa for less than an accumulated six months in any 12-month period, or (c) is an enterprise solely as a result of supplying electronic services and meeting the 2-out-of-3 test. Once a supplier no longer falls within those exclusions, it must open a South African bank account. Registration is by emailing a completed VAT101 and supporting documents to [email protected]. [1]

All of my South African customers are VAT-registered businesses — must I still register for VAT?​

Not if you supply solely to VAT-registered vendors. The 2025 Regulations (Government Notice 5993 in Government Gazette 52293 of 14 March 2025), effective 1 April 2025, introduced a form of B2B exclusion: supplies by a foreign supplier that makes supplies only to VAT-registered vendors do not fall under paragraph (b)(vi) of the "enterprise" definition in section 1 of the VAT Act. Before 1 April 2025 there was no B2B/B2C distinction and such supplies were standard-rated. The exclusion is all-or-nothing on the customer base — one unregistered South African customer takes you outside it. Telecommunications services, educational services regulated by an education authority in the export country, and certain intra-group supplies were already excluded from "electronic services". [1]

Is e-invoicing mandatory in South Africa?​

No. There is no mandatory B2B e-invoicing or clearance mandate in force. The Tax Administration Laws Amendment Act 4 of 2026 (Government Gazette 54447, 1 April 2026) inserts definitions of "e-invoice", "e-debit note", "e-credit note", "e-reporting" and "interoperability framework" into section 1 of the VAT Act, and inserts section 74(1B), empowering the Minister to make regulations prescribing requirements for participation by a vendor in a voluntary e-reporting system. An "e-invoice" is a tax invoice issued, transmitted and received in a structured electronic format allowing automatic and electronic processing, and complying with such further requirements as the Minister may prescribe by regulation. Technical requirements and any onboarding dates must still come by regulation. [1]

SARS's Discussion Paper on Value-Added Tax Modernisation proposes phased digital transmission of VAT data, starting with the vendor segment contributing roughly 80% of total VAT revenue (monthly Category C vendors, Large Business and International vendors, B2G suppliers, high-risk segments and volunteers), but it carries an explicit disclaimer that it does not represent the official view of SARS. [2]