What to consider when registering for VAT.

Compulsory registration

All private companies have to register for VAT within 21 days after the turnover for 12 consecutive months has passed R1m.

Voluntary registration

SARS looks at certain scenarios where a private company can voluntarily register for VAT. Some of these scenarios include:

  • Where the turnover has exceeded R4 200 for one month.
  • Where the turnover for 12 consecutive months.
  • Where the expenses have exceeded R50 000 for a period of 12 months.
  • Where written contracts are in place that indicates that expenses will exceed R50 000 for the next 12 months.
  • Where the company has entered into a finance agreement with a financial institution or any other institution regulated by the NCR(National credit act)

SARS have started to apply these rules more strictly in order to avoid corruption. This means that in some cases, where SARS believes that the abovementioned scenarios do not apply, they will ask for supporting documents. The turnaround time for them to inspect the documents, and decide whether to issue a VAT number is then 21 business days. We can assist clients in registering their private companies for VAT, simply click on the link below. It is important to note that the company has to have a registered public officer at SARS, in order to have access to eFiling.

Register for VAT

Read more about VAT here.

VAT registration at SARS