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South Africa

  • banking details required by SARS;

  • copy of the ID or passport of the fiscal representative;

  • copy of municipal account of business and representatives; and

  • copies of latest three months’ bank statements, for purposes of determining value of business’s taxable supplies.

There are no penalties for late registration or for failing to do so. However, output VAT plus penalties and interest will be due on supplies that have not yet been declared at the time the business should have been registered for VAT purposes.

The registration number of resident and nonresident businesses consists of 10 digits, starting with a ‘4’, e.g. 499 9999 999.

With effect from 1 March 2009, certain persons with a turnover not exceeding ZAR1 million during the year of assessment who do not render professional services and meet certain other requirements, may apply to be registered for the turnover tax for micro-businesses. When the turnover tax applies, it replaces VAT, income tax, provisional tax, capital gains tax and secondary tax on companies.


A vendor who was obliged to register, but whose taxable supplies have not exceeded ZAR1 million, has the option of deregistering. A vendor must apply for deregistration if his taxable supplies did not exceed the ZAR20,000 voluntary registration limit, or when the vendor ceases to carry on an enterprise. SARS may deregister a vendor who voluntarily registered if it no longer has a fixed place of business, a bank account or proper accounting records.



Upon deregistration the vendor must pay output tax on all assets of his enterprise held by him immediately prior to his deregistration. If a vendor is deregistered as he has been registered as a micro-business for turnover tax purposes, the amount on which the deregistration output tax is payable is reduced by ZAR100,000.

Output tax

Advertising and prices

Advertised prices must include VAT. If the VAT inclusive and VAT exclusive prices are advertised or quoted, both prices must be advertised or quoted with equal prominence.

Prices charged for taxable supplies are deemed to include VAT, whether or not the vendor has included VAT in the price.

Calculation of output tax

Output tax, which must be accounted for on a taxable supply, is calculated by applying the tax fraction (14/114) to the price charged.

Exemptions and zero-rating

Exempt supplies

Supplies of (inter alia) the following goods or services are exempt:

  • certain financial services;

  • donated goods or services supplied by an association not for gain;

  • residential accommodation in a dwelling;

  • leasehold land that is or will be used to erect a dwelling;

  • land (including existing improvements) situated outside South Africa;

  • management services supplied by bodies corporate of sectional title property schemes, share block companies and housing development schemes for retired persons;

  • passenger transport by road or railway;

  • educational services;

  • crèche and after-school services;

  • services supplied by employee organisations against payment of membership contributions; and

  • goods in a licensed Customs and Excise storage warehouse, if the goods have not been entered for home consumption (unless approval is obtained to zero-rate the supply).

Zero-rated supplies

Supplies of (inter alia) the following goods or services are zero rated:

  • exportation of goods (provided procedural and documentary requirements have been met);

  • supply of an enterprise as a going concern;

  • unmanufactured gold supplied to the South African Reserve Bank, the South African Mint Company or a registered bank;

  • certain gold coins;

  • certain agricultural products supplied under prescribed circumstances;

  • fuel levy goods and petroleum oil;

  • goods transferred to a foreign branch;

  • basic foodstuffs such as brown bread, brown wheaten meal, maize meal, samp, mealie rice, dried maize, beans and lentils, pilchards or sardinella, rice, vegetables, fruit, vegetable oil, milk, cultured milk,

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