The 15% rate, the new R2.3 million registration threshold, tax periods, VAT201 deadlines and tax invoice rules — explained for business owners.
South Africa’s standard VAT rate is 15%. An increase to 15.5% was announced in the 2025 Budget but withdrawn, and the rate stayed at 15% in the 2026 Budget.
Some supplies are zero-rated — VAT at 0%, with input tax still claimable — including exports and a list of basic foodstuffs such as brown bread, maize meal, rice, fresh fruit and vegetables, milk and eggs. Others are exempt, such as financial services, residential rental and public road and rail passenger transport; no VAT is charged and related input tax generally cannot be claimed.
| Test | Threshold |
|---|---|
| Compulsory registration | Taxable supplies above R2.3 million in any 12 months (from 1 April 2026; previously R1 million) |
| Voluntary registration | Taxable supplies above R120,000 in the past 12 months (from 1 April 2026; previously R50,000) |
The 2026 Budget raised both thresholds from 1 April 2026 — the first big change in years. If your taxable supplies go over R2.3 million in any 12-month period, or you expect them to, you must register with SARS within 21 business days. Below that, you can choose to register voluntarily once you have made more than R120,000 of taxable supplies in the past 12 months.
Check where you stand with the South Africa VAT calculator.
SARS puts every vendor in a tax-period category:
| Category | Period |
|---|---|
| Category A / B | Every two months — the usual category for most businesses |
| Category C | Monthly — compulsory if taxable supplies exceed R30 million a year |
| Category D | Every six months — small-scale farming and some other vendors |
| Category E | Annually — certain vendors such as some property-letting entities |
The VAT201 return and payment are due by the 25th of the month after the period ends. If you submit and pay on eFiling, you have until the last business day of that month.
Late payment brings a 10% penalty plus interest, and late returns can attract administrative penalties — so close each period with time to spare.
Without a valid tax invoice from your supplier, you cannot claim the input tax.
Apply the VAT treatment as each invoice and bill is recorded, not at the end of the period. In ETaxFlow every line carries its VAT treatment, input tax is tracked as you go and the VAT201 figures build themselves — with drill-down to the documents behind each number. See South Africa VAT accounting software, and the PAYE, UIF and SDL guide for payroll taxes.
15%. The proposed increase to 15.5% was withdrawn in 2025 and the rate was unchanged in the 2026 Budget.
From 1 April 2026, compulsory registration applies once taxable supplies exceed R2.3 million in any 12 months, up from R1 million. The voluntary threshold rose from R50,000 to R120,000.
By the 25th of the month after the tax period ends, or the last business day of that month for returns and payments made on eFiling.
When the total is more than R5,000. Abridged tax invoices can be used between R50 and R5,000.