What is the minimum threshold for VAT registration?

What is the minimum threshold for VAT registration?


Persons who make taxable supplies in excess of R1 million in any 12-month consecutive period are liable for compulsory VAT registration, but a person may also choose to register voluntarily provided that the minimum threshold of R50 000 (as of 1 March 2010) has been exceeded in the past 12 month period.

Persons who are liable to register, and those who have registered voluntarily are referred to as vendors.

Only vendors are expected to perform certain duties and take on certain responsibilities if they are registered or liable to register for VAT. For example, vendors are required to ensure that VAT is collected on taxable transactions, that they submit returns and payments on time, that they issue tax invoices where required and that they include VAT in all prices advertised or quoted.

Big companies prefer to work with companies that are registered to pay VAT. The only way to obtain a VAT number is to register with SARS or when you buy a “shelf-company” you will automatically be given a VAT number. There are no other ways to obtain a VAT number.

If you do not receive a large number of VAT invoices and turnover is below the required amount, then it would be advisable not to register for VAT. As a vendor with a VAT number and the business turnover is below the threshold, you must still submit a return, even if the VAT amount on the return is zero.

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