From 1 April 2026, South Africa’s compulsory VAT registration threshold is R2.3 million, while the general voluntary threshold increased to R120,000, subject to the applicable VAT rules and exceptions. Review taxable supplies over the relevant 12-month period and expected supplies before deciding what applies. The threshold change does not by itself make a business a VAT vendor or cancel an existing registration.
The VAT threshold changed on 1 April 2026. Your business did not automatically become VAT registered or deregistered on that date.
That distinction is important.
The threshold tells you when registration may become compulsory or when voluntary registration may be available under the VAT rules. Your actual position depends on taxable supplies, timing, existing registration and any rule or exception that applies to the business.
This guide explains the change for practical business planning. It is not tax advice.
The compulsory threshold increased to R2.3 million
SARS confirms that the compulsory VAT registration threshold increased from R1 million to R2.3 million from 1 April 2026.
The practical question is not simply “What is my bank turnover?”
VAT registration rules work with taxable supplies and the relevant 12-month test. Review the actual supplies made by the business and the supplies it is reasonably expected to make.
If you are close to the threshold, use your accounting records rather than an estimate from memory.
Record month-by-month taxable supplies so you can see when the rolling position changes.
The general voluntary threshold increased to R120,000
SARS also states that the general voluntary registration threshold increased from R50,000 to R120,000 from 1 April 2026, subject to the applicable rules and exceptions.
Voluntary registration is not the same as compulsory registration.
A business below R2.3 million should not assume that VAT registration is either impossible or automatically beneficial. Eligibility and the commercial effect depend on the circumstances.
Before voluntarily registering, consider questions such as:
- Are your customers mainly VAT vendors or consumers?
- Will adding VAT affect your effective customer price?
- Does the business incur meaningful VAT-bearing expenses?
- Can your bookkeeping process support VAT returns and records?
- Does a contract or procurement process expect VAT registration?
Those are business and tax questions, not invoice-template questions.
Existing VAT registration does not disappear automatically
A higher compulsory threshold does not mean an existing VAT number should simply be removed from invoices.
If the business is already registered, confirm its current registration status and the rules for cancellation before changing how invoices are issued.
Do not stop charging VAT merely because annual taxable supplies are now below the new compulsory threshold.
Likewise, do not start charging VAT merely because you believe the business will cross R2.3 million soon. Registration timing and effective dates matter.
Check the SARS registration record or speak with a tax practitioner when the position is uncertain.
Use taxable supplies, not a vague revenue number
The phrase “turnover threshold” is convenient but can hide the calculation you actually need.
Build a simple working schedule with:
| Month | Taxable supplies | Running 12-month total | Notes |
|---|---|---|---|
| April | |||
| May | |||
| June | |||
| July |
Keep exceptional transactions visible so they can be checked against the VAT rules instead of being silently included or excluded.
If the business has exempt, zero-rated, once-off or unusual transactions, do not guess how they affect the test. Confirm their treatment.
Review both actual and expected supplies
A business can need to consider more than what happened in the previous twelve months.
If signed contracts or predictable trading make it clear that taxable supplies will exceed the compulsory threshold in the relevant future period, the expected-supplies test can matter.
Use evidence:
- signed contracts;
- recurring customer agreements;
- reliable order books;
- existing monthly run rate;
- confirmed projects.
Do not manufacture a forecast to justify a preferred VAT outcome.
The purpose of the forecast is to identify the registration obligation in time.
What changes on an invoice when you are VAT registered?
A registered VAT vendor needs a tax-invoice process that captures the information required by SARS for the transaction.
That can include:
- supplier details;
- VAT registration number;
- invoice serial number;
- date;
- recipient details where required;
- goods or services supplied;
- quantity or volume;
- value;
- VAT information;
- total consideration.
See the IDJoy guide on what must appear on a South African tax invoice for the practical checklist.
If you are not a VAT vendor, do not add a VAT line that makes it appear you are collecting VAT as a registered supplier.
You can still send a professional invoice. It simply needs to reflect the business’s actual tax status.
What the threshold change means for quotes
A quotation should make pricing assumptions clear, especially when VAT status may affect the final price.
If the business is VAT registered, state whether quoted prices include or exclude VAT in a way the customer can understand.
If the business is not VAT registered, avoid wording that implies VAT is included as a separate tax collected by the supplier.
For long-running proposals that may cross a future registration date, get accounting advice on how the eventual supply should be treated rather than trying to solve the issue with a generic clause.
Do not use the invoice generator to decide VAT status
The IDJoy Invoice Generator includes a VAT or tax percentage field because registered businesses need arithmetic support.
The field is optional.
The tool does not know:
- whether the supplier is registered;
- the effective registration date;
- whether the supply is standard-rated, zero-rated or exempt;
- whether a special VAT rule applies;
- whether the business qualifies for voluntary registration.
That separation is intentional. A document tool should calculate the values you enter, not pretend to replace a tax decision.
Run this VAT threshold check
Use these eight steps:
- Confirm whether the business is currently VAT registered.
- Pull actual taxable-supply figures from accounting records.
- Calculate the relevant rolling 12-month amount.
- Review evidence for expected taxable supplies.
- Compare the position with the R2.3 million compulsory threshold.
- If considering voluntary registration, compare the position with the R120,000 general voluntary threshold and check applicable rules or exceptions.
- Confirm the effective registration or cancellation position before changing invoices.
- Update the invoice process only after the VAT status is clear.
The downloadable decision sheet below gives you fields for those checks.
Keep the evidence with the decision
Threshold decisions should be reproducible.
Keep the working calculation, source accounting figures, relevant contracts and any SARS or professional guidance used for the decision.
If the position changes three months later, you can update the schedule without rebuilding the logic from scratch.
You can use the free IDJoy Invoice Generator for the document itself. It works in the browser and does not store your client, banking or invoice details with IDJoy.