COMPULSORY VAT REGISTRATION
The R1 Million Threshold: If your business's taxable sales exceed R1 million in any 12-month period, you must register for VAT.
Forward-Looking Obligation: You must also register if you reasonably expect sales to exceed this threshold in the next 12 months.
Consequences of Non-Compliance: Failing to register when compulsory can result in penalties, interest, and back-dated VAT liability.
VOLUNTARY VAT REGISTRATION
Lower Threshold: If your taxable supplies exceed R50,000 in 12 months, you may register voluntarily.
Claiming Input Tax: VAT vendors can claim back VAT on business expenses.
Credibility & Competitive Advantage: Many clients and tenders require VAT registration, giving you a professional edge.
Pay As You Earn (PAYE) & Employee Tax Liability
Employee/Director Obligation: Anyone earning above the tax threshold must register with SARS.
1. Employer Obligation: Employers must register for PAYE once staff are hired and liable for tax.
2. UIF Obligation: If registered for PAYE, you must also register for UIF. Both employer and employee contribute.
3. SDL Obligation: If payroll is expected to exceed R500,000 in 12 months, you must register for SDL.
A Tax Clearance PIN is proof of your tax compliance status with SARS.
Why You Need It:
• Bidding for Tenders: Required by government and corporates.
• Finance Applications: Needed for loans and bank facilities.
• Foreign Investment / Emigration: Required for moving funds abroad.
• Good Standing: Confirms your SARS affairs are up to date.
