VAT (Value-Added Tax) is the 15% tax SARS levies on most goods and services sold in South Africa. Vendors charge it on output (their sales) and reclaim it on input (their purchases) — only the net difference is paid over to SARS, usually every two months (monthly for the largest vendors) via the VAT201 return.
Registration is mandatory once taxable turnover crosses R2.3 million in any 12-month period (raised from R1 million effective 1 April 2026). Below R2.3m you can register voluntarily once you’ve made R120,000 in sales (up from R50,000 before 1 April 2026); many small businesses do this so they can reclaim VAT on equipment and supplies.
Some categories are zero-rated (basic foodstuffs like brown bread, rice, and maize meal; exports; fuel) and some are exempt (residential rent, many financial services, public road and rail transport). The difference matters: zero-rated vendors still claim input VAT, exempt vendors can’t.