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 monthly or every two months via the VAT201 return.
Registration is mandatory once taxable turnover crosses R1 million in any 12-month period. Below R1m you can register voluntarily once you’ve made R50,000 in sales; 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, financial services, public road and rail transport). The difference matters: zero-rated vendors still claim input VAT, exempt vendors can’t.