Are You Charging VAT? Here's What You Should Know in 2025

A Complete Guide for South African Business Owners

In South Africa, Value-Added Tax (VAT) is one of the most important components of compliance for registered businesses. If your business earns more than R1 million in 12 months, you are legally required to register for VAT with the South African Revenue Service (SARS). In 2025, understanding VAT laws and ensuring you're fully compliant has become more critical than ever. This guide will unpack everything you need to know about charging VAT, how VAT affects your business, and how MMT Financial Services can help you stay on the right side of the law.

What is VAT?

Value-Added Tax (VAT) is an indirect tax levied on the consumption of goods and services in South Africa. It is currently set at 15% and is included in the price of most items. Businesses that are registered for VAT act as agents for SARS by collecting VAT from customers and submitting it periodically.

There are three categories of supplies:

1. Standard-rated supplies – taxed at 15%.

2. Zero-rated supplies – taxed at 0% (e.g., certain food items, fuel, exports).

3. Exempt supplies – not subject to VAT (e.g., educational services, certain financial services).

Who Needs to Register for VAT?

VAT registration with SARS can be either compulsory or voluntary:

• Compulsory registration: If your taxable turnover exceeds R1 million in any 12-month period.

• Voluntary registration: If your turnover is at least R50,000 per month for the past 12 months.

Failure to register when required can result in penalties and interest. SARS is tightening compliance measures in 2025, making it essential to assess your eligibility.

MMT Financial Services can help assess your VAT liability and guide you through the registration process, ensuring no details are missed.

How to Register for VAT

The registration process is handled through the SARS eFiling portal or in person at a SARS branch. Documents required include:

• Business registration certificate

• Bank confirmation letter

• Proof of address

• Copy of ID/Passport of representative

Once your application is approved, you’ll receive a VAT number, which must be displayed on your invoices.

MMT’s tax consultants can handle the full registration process for you, ensuring compliance with current SARS protocols.

Charging and Collecting VAT

Once registered, you must:

• Add 15% VAT to the selling price of standard-rated goods/services.

• Issue valid tax invoices.

• Submit VAT returns (usually bi-monthly).

• Make payments to SARS on time.

A valid tax invoice must contain:

• The words “TAX INVOICE”

• VAT registration numbers (yours and the customer’s, if applicable)

• Invoice number

• Date of issue

• Description of goods/services

• Amount excluding VAT, VAT amount, and total including VAT

Filing VAT Returns

VAT returns must be submitted via SARS eFiling using the VAT201 form. Returns are generally due every two months, but SARS may require monthly or annual returns depending on your turnover.

VAT201 requires information on:

• Output tax (VAT you’ve charged)

• Input tax (VAT you’ve paid on business purchases)

Net VAT = Output VAT - Input VAT

If the result is positive, you pay the difference to SARS. If negative, you can claim a refund.

MMT’s bookkeeping team ensures every allowable input tax is captured, so your VAT liability is always correct and you don’t overpay.

Common VAT Mistakes to Avoid in 2025

1. Not registering on time: Penalties and interest apply if your turnover exceeded R1 million and you didn’t register.

2. Incorrect invoicing: Missing VAT numbers or invoice details can lead to non-compliance.

3. Late submissions: SARS imposes fines for late returns and payments.

4. Claiming disallowed input tax: Certain expenses (like entertainment) are not claimable.

5. Incorrect VAT calculations: Misunderstanding how to calculate VAT-inclusive vs VAT-exclusive prices.

2025 SARS VAT Deadlines to Note

Period	Submission Deadline	Payment Deadline
Jan-Feb (2025/01)	31 March 2025	31 March 2025
Mar-Apr (2025/02)	31 May 2025	31 May 2025
May-Jun (2025/03)	31 July 2025	31 July 2025
Jul-Aug (2025/04)	30 September 2025	30 September 2025
Sep-Oct (2025/05)	30 November 2025	30 November 2025
Nov-Dec (2025/06)	31 January 2026	31 January 2026

(Always confirm deadlines directly on the SARS website.)

What Happens if You Don’t Comply?

Non-compliance can lead to:

• Penalties up to 10% of the VAT due

• Interest charged daily

• Suspension of refunds

• Legal action by SARS

MMT Financial Services monitors your VAT profile and deadlines to ensure you’re always compliant.

How MMT Financial Services Can Help

MMT offers tailored VAT compliance support, including:

• VAT registration and deregistration

• Monthly VAT201 submissions

• Review of input tax claims

• Annual SARS audits and VAT reviews

• Dispute resolution support

Our team of accountants and tax professionals is trained to navigate South African tax laws and ensure your VAT processes are efficient, accurate, and audit-proof.

Summary Checklist: VAT Compliance for 2025

✅ Check if your turnover exceeds R1 million in 12 months✅ Register for VAT through SARS eFiling✅ Use proper invoicing formats with VAT numbers✅ Charge the correct VAT rate (15%)✅ Keep records of all input VAT and output VAT✅ Submit VAT201 returns on time✅ Keep proof of VAT payments✅ Use a tax consultant like MMT to reduce your stress

VAT can seem complex, but with the right systems and expert support, it becomes a seamless part of your business operations. Staying compliant means avoiding penalties and taking advantage of input tax claims that reduce your overall liability.

MMT Financial Services simplifies VAT so you can focus on running your business. From registration to monthly filing and audit support, we make tax compliance easy, affordable, and stress-free.

Ready to take the VAT burden off your plate? Let MMT handle your VAT — so you don’t have to.