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Warning! SARS will refuse your Vat registration in these five instances

by , 04 March 2014
SARS has more power than you think. Not only can it impose harsh penalties for non-compliance, come unannounced to your premises, but it also has the power to refuse your Vat registration. And that's exactly what it'll do in these five circumstances...

Five instances when SARS can refuse your Vat registration

There are two types of Vat registration: Compulsory registration and voluntary registration.

Experts at the Accounting & Tax Club explain that if you have a business and your total taxable turnover exceeds or is likely to exceed the R1 million threshold in any 12-month period, you have no option; you must register for Vat (compulsory registration).

The experts go on to say, on the other hand, even if your taxable turnover doesn't exceed the R1 million threshold, you'll be allowed to register for Vat voluntarily in any of these situations:

  • If you carry on a business that's not a welfare organisation, local authority or share a block company and your taxable turnover is greater than R50 000 in any period of 12 months.
  • If it's the nature of your business that taxable supplies will only be made after some time, but you reasonably expect to make taxable supplies that exceed R50 000 in value over a 12 month period.

If you apply for voluntary registration, SARS can refuse to register you in the following five circumstances:

  1. If you have no fixed business or residential address;
  2. If you don't keep proper accounting records relating to any of your enterprises;
  3. If you haven't opened a banking account with a bank, for the purpose of the business you're running;
  4. If you don't bring the supporting documents with your VAT101 application form; and
  5. If you were previously registered as a vendor for any enterprise, under the Vat Act and failed to perform your duties in terms of the Act.

Is there anything you can do if SARS refuses your Vat Registration?


The Practical Vat Loose Leaf Service says if SARS refuses your Vat registration, it should give you reasons you for doing so in writing.

'Based on these reasons and if you feel you MUST Vat register, you should then make an appointment with your SARS office to take this matter further,' adds the Loose Leaf Service.

The bottom line: If you want to ensure SARS doesn't refuse your Vat registration, make sure all your affairs are in order before your register.

P.S. Every year, SARS rejects 90% of all Vat Registrations. Don't become a statistic.


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