Registering for VAT can be a long and arduous process. Below is a short list of the requirements by SARS to ensure a successful registration application.
- Company registration document
- Certified ID copies of members/directors
- Proof of address of the company
- Proof of address of the representative taxpayer (member/director selected as public officer)
- Bank confirmation letter and recent bank statements
- Total sales amount for the last 12 months
- Latest sales invoices
Proof of address
These should be in the form of a utility bill like electricity or water. SARS usually does not accept other forms like clothing bills or bank statement addresses.
SARS has a CRA01 form used in the cases where the utility bill is not in the name of the company or individual. This form is filled in by the landlord confirming that the applicant rents the place in question. This also applies where a company is based at a house owned or rented by the member/director.
Compulsory or voluntary?
Just note that SARS is now more strict on who to approve VAT applications for. Businesses must register for VAT when their taxable supplies exceed R2.3 million in a 12-month period, or when they expect to reach that amount. Businesses with taxable supplies of less than R2.3 million but more than R120 000 in the last 12 months can apply to register voluntarily, and it is up to SARS to approve it or not.
You can also be approved for VAT if you can prove solid future revenue meeting the requirements in the next 12 months. This might include a sales order or contract, among other things.
We advise companies to consult with experts before registering for VAT to weigh in the pros and cons of registering, as this brings in more work and compliance requirements that might actually turn out to be a burden for small businesses and start-ups.
Get in touch with us for assistance and consultation on the above matters. See our VAT registration service.
This article is general information, not advice for your specific situation. Rules and fees change — contact us to confirm what applies to you.