How to Do VAT Returns in South Africa in 2026

VAT returns are one of the most important compliance obligations for South African businesses. Get them right and SARS is happy. Get them wrong and you’re looking at penalties, interest and potential audits. The good news is that once you understand the process, VAT returns are straightforward — especially with the right accounting software.

This guide walks you through everything you need to know about VAT returns in South Africa in 2026.

What is VAT in South Africa?

VAT (Value Added Tax) is a tax collected by businesses on behalf of SARS. In South Africa the standard VAT rate is 15% — added to the price of most goods and services.

As a VAT-registered business you collect VAT from your customers (output VAT) and pay VAT to your suppliers (input VAT). The difference between what you collected and what you paid is what you owe SARS — or what SARS owes you.

Do You Need to Register for VAT?

Compulsory VAT registration: You must register for VAT if your taxable turnover exceeds R1 million in any 12-month period.

Voluntary VAT registration: You can voluntarily register for VAT if your turnover exceeds R50,000 per year. Voluntary registration can be beneficial if your clients are VAT-registered businesses — they can claim back the VAT you charge them.

Who is exempt from VAT:

Businesses with turnover below R50,000 per year
Certain exempt supplies — residential rental, financial services, public transport

Step 1 — Register for VAT with SARS

Before you can submit VAT returns you need to register for VAT with SARS.

How to register:

Log into sars.gov.za/eFiling or visit your nearest SARS branch
Complete the VAT101 form — Registration for Value Added Tax
Provide supporting documents — business registration, bank details, proof of address
SARS will conduct a verification visit for new VAT registrations
Once approved you’ll receive your VAT registration number

Processing time: 5–21 business days depending on SARS workload

Step 2 — Understand Your VAT Period

Once registered SARS will assign you a VAT period — the frequency at which you must submit VAT returns.

Monthly VAT returns: Required if your taxable supplies exceed R30 million per year. Most large SA businesses.

Two-monthly (bi-monthly) VAT returns: The most common VAT period for South African small and medium businesses. You submit every two months.

Six-monthly VAT returns: Available for very small SA businesses with taxable supplies below R1.5 million per year and consistent VAT payments.

Your VAT return is due by the last business day of the month following the end of your VAT period.

Step 3 — Track Your Output VAT and Input VAT

Throughout your VAT period you need to track two things:

Output VAT — VAT you collect This is the 15% VAT you charge your customers on your invoices. Every VAT invoice you issue generates output VAT that you owe to SARS.

Example:

You invoice a client R11,500 (R10,000 + R1,500 VAT)
Your output VAT is R1,500

Input VAT — VAT you pay This is the 15% VAT included in invoices from your suppliers. You can claim this back from SARS.

Example:

You pay a supplier R2,300 (R2,000 + R300 VAT)
Your input VAT is R300

VAT payable to SARS: Output VAT (R1,500) minus Input VAT (R300) = R1,200 payable to SARS

VAT refund from SARS: If your input VAT exceeds your output VAT SARS owes you a refund. This commonly happens for exporters and businesses with large capital expenditure.

Step 4 — Prepare Your VAT Return

At the end of your VAT period you need to calculate your total output VAT and input VAT for the period.

What you need:

All VAT invoices issued to customers (output VAT)
All VAT invoices received from suppliers (input VAT)
Bank statements for the period
Your accounting software reports

Good accounting software makes this easy: Tools like Sage, Xero and QuickBooks automatically track your VAT transactions and generate a VAT report at the end of each period — showing exactly what you owe or are owed. This is the biggest time-saver for SA business owners doing VAT returns.

Step 5 — Submit Your VAT201 Return on eFiling

How to submit your VAT return:

Log into sars.gov.za/eFiling
Click on “Returns” in the top menu
Select “Value-Added Tax”
Click on “VAT201”
Select the relevant VAT period
Complete the VAT201 form:
- Field 1 — Total value of standard rated supplies (your sales excluding VAT)
- Field 4 — Output tax (VAT collected from customers)
- Field 15 — Input tax (VAT paid to suppliers)
- Field 20 — VAT payable or refundable
Review and submit
Make payment if VAT is payable

Payment deadline: VAT must be paid by the last business day of the month following your VAT period end. Missing this deadline results in interest at 10.5% per year plus a 10% penalty.

Step 6 — Pay Your VAT

If you owe VAT to SARS you can pay via:

eFiling payment: The easiest option — pay directly through your SARS eFiling account linked to your business bank account.

EFT bank transfer: Pay directly to SARS’s bank account. Use your VAT reference number as the payment reference. Details are available on your VAT201 return.

At a SARS branch: You can pay in person at any SARS branch — but this is the slowest option and best avoided.

Common VAT Mistakes South African Businesses Make

Claiming VAT on non-VAT invoices You can only claim input VAT on invoices from VAT-registered suppliers. If your supplier is not VAT-registered their invoice cannot include VAT — and you cannot claim it.

Missing the submission deadline VAT returns must be submitted and paid by the last business day of the month following your VAT period. Set calendar reminders — missing the deadline means automatic penalties.

Not keeping valid tax invoices SARS requires specific information on tax invoices for input VAT claims. A valid SA tax invoice must include:

The words “Tax Invoice”
Supplier’s VAT registration number
Invoice number and date
Description of goods or services
VAT amount shown separately
Total amount including VAT

Mixing business and personal expenses You can only claim input VAT on genuine business expenses. Never claim VAT on personal purchases — SARS auditors look for this.

Incorrectly calculating VAT VAT is calculated as 15/115 of the VAT-inclusive price — not 15% of the VAT-inclusive price. Good accounting software handles this automatically.

VAT and Accounting Software

Using accounting software makes VAT returns dramatically easier. The best options for South African businesses:

Sage Business Cloud Automatically tracks VAT, generates VAT reports and integrates with SARS eFiling. The gold standard for SA VAT compliance.

👉 Try Sage free for 30 days

Xero Excellent VAT tracking with automatic VAT reports and good SARS eFiling integration.

👉 Try Xero free

QuickBooks Decent VAT tracking though less SA-specific than Sage or Xero.

VAT Return Checklist for South African Businesses

✅ Collect VAT on all standard-rated sales
✅ Keep valid tax invoices for all purchases
✅ Reconcile your VAT account monthly
✅ Submit VAT201 by the deadline
✅ Pay VAT owed by the last business day of the month
✅ Keep records for at least 5 years — SARS can audit you

Summary

VAT returns don’t have to be stressful. The key is keeping good records throughout your VAT period — ideally using accounting software that tracks everything automatically — and submitting on time every period without fail.

If you’re unsure about any aspect of your VAT obligations, consult a registered South African tax practitioner. The cost of professional advice is far less than the cost of getting it wrong.

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How to Do VAT Returns in South Africa in 2026 — Complete Guide