Registering for Value Added Tax (VAT)

Mandatory VAT registration

Once your company exceeds R1 million in annual sales, you are legally required to register for VAT at SARS. Businesses that fall into this category are referred to as vendors. Upon registration, you are permitted to add the extra charge to the total price of your products and services. New vendors are required to complete and submit the VAT 101 form- Application for registration at SARS centers, no later than 21 days after surpassing the R1 million sales mark.

Voluntary VAT registration

If you have a new company, you can voluntarily register for a VAT number for your business. That is if your annual sales fall below R1 million. As of March 1st, 2010, the minimum threshold for voluntary VAT registration was R50 000 in sales accrued over a period of 12 months. However under the new changes, if you earn more than R4 200 a month (for at least 2 months), you are eligible to apply for a number. These companies are mainly micro-businesses that may include individuals, partnerships or cooperatives. Normally, these micro-businesses are subject to a turnover tax that’s why they are not mandated to register separately. It is really up to you and how you decide to scale your business operations.

VAT Registrations: Value Added Tax – VAT Registrations (Business)

Please read through the following important info before submitting your application:

The business must be able to proof an income of at least R50 000 by ways of invoices issued to clients/customers. VAT registrations CANNOT be done without these documents.

The business must be able to provide the latest 3 months bank statements indicating all income and expenses that have occurred. VAT registrations CANNOT be done without this.

Therefore a brand new business who cannot provide the documentation as listed in points 1 & 2 above MUSTN’T apply for VAT registration until such documentation can be supplied.

Value Added (VAT registration) is a very complex and time consuming procedure as we need to set up an appointment with a SARS office, conduct an interview with a SARS representative, present all documentation to SARS. SARS then needs to verify all these details which might include a site visit. Therefore the turnaround time for VAT registration is between 21 and 40 working days after we have received all supporting documentation from you. (There are no quick fixes or solutions).

A business must be registered for income tax and have an income tax number (starts with a 9….) before application for a VAT number can be supplied. You can register your business for income tax here.

All supporting documents as listed below must be supplied without exception to ensure a successful VAT registration process. Supporting documents to be supplied to us after completing the online application form:

  • Original cancelled cheque or original stamped letter from your bank. The bank details must be in the business name.
  • Certified copy(s) of the ID’s of all the members/directors of the business.
  • Certified copy of the representative vendor as completed on the application form.
  • Most recent copy of the business municipal account. If this cannot be supplied a lease agreement in the company name or a sworn affidavit clearing stating the business address must be supplied.
  • Most recent copy of the municipal account of the representative vendor.
  • Copies of bank statement for the last 3 months.
  • Copies of customer invoices to the R-value of at least R50 000.
  • Copy of Incorporation Certificate (CK1/CK2/COR14_3 etc.).
  • Power of Attorney form to be completed and signed as indicated (Download Power of Attorney form).
  • Representative Vendor form to be completed and signed as indicated (Download Declaration by VAT Vendor form).
  • All of the above documentation must be delivered to our offices in Parkhurst.

This service costs R 4,500.00. Please make sure information on this form is entered correctly as we rely heavily on information supplied. Incorrect information will cause a delay in the service.