Value-added tax (VAT) is an important consideration for businesses and sole proprietors in South Africa. If your business reaches the VAT registration threshold, which is currently over R1 million in any 12 months, you need to register for VAT. Many business owners wonder if they can register online through SARS eFiling rather than submitting physical paperwork.
Who Needs to Register on VAT?
VAT is a tax on the consumption of goods and services in South Africa. It’s paid when money exchanges hands and is ultimately borne by the end consumer. VAT is charged at each step of the production and distribution process but is only paid to SARS by entities who register for VAT.
All businesses and sole proprietors with a taxable turnover of more than R1 million in any consecutive 12-month period must register for VAT. Voluntary registration is also available even if the R1 million threshold has not been met.
Overview of the VAT Registration Process
There are a few steps involved in registering for VAT in South Africa:
- Determine if you are liable or eligible to register based on taxable supplies
- Collect and prepare the required registration documents
- Submit your VAT Application Form (VAT101) and supporting documents to SARS
- SARS will review the application and notify you of the outcome
- Once approved, you will receive a VAT registration certificate with your VAT number
So how much of this VAT registration process can you complete online through SARS eFiling versus having to submit physical paperwork?
Registering for VAT on the SARS eFiling Website
The SARS eFiling platform allows taxpayers to register, file returns, make payments, and perform various other interactions with SARS online. SARS actively promotes the use of digital services to increase efficiency. But is fully online VAT registration possible right now?
Unfortunately, you cannot complete the entire VAT registration application online on the eFiling platform currently. However, eFiling does allow you to complete significant portions of the process digitally. These include:
1. VAT101 Form Part A
You can submit Part A of the VAT Registration Application Form (VAT101) electronically on eFiling before submitting the rest of the paperwork manually. Part B still needs to be printed and physically signed before sending to SARS with supporting documents.
2. Uploading of Supporting Documents
eFiling allows you to upload electronic copies of supporting registration documents like financial statements, bank statements, municipal accounts, and more. This eliminates the need to physically submit paperwork to SARS and is more convenient.
3. Communication with SARS
The eFiling platform allows ongoing, real-time communication with SARS officials through its Communications center. You can also receive notifications and letters regarding your VAT registration progress online rather than waiting for postal mail.
Although fully online VAT registration and approval is not yet possible on eFiling, you can complete significant parts of the process digitally. This saves time and effort compared to traditional manual paperwork submissions. SARS is also gradually improving eFiling capabilities over time.
Step-by-Step VAT Registration Process on eFiling
Here is a step-by-step overview of completing VAT registration on eFiling currently:
- Determine your eligibility to register for VAT in South Africa
- Access eFiling and navigate to “Register for VAT” under “Manage Tax Types”
- Complete Part A of the VAT101 form digitally on eFiling
- Download, print, and complete physical Part B of the VAT101 form
- Collect and certify any required supporting documentation
- Upload scanned copies or images of supporting documents on eFiling
- Physically submit signed Part B of VAT101 plus original documents to the SARS office
- Communicate with SARS digitally through eFiling for queries
- Receive notifications and registration certificate online once approved
So while a few manual processes still exist currently, eFiling allows you to digitally complete around half the overall VAT registration workflow.
Use a VAT Calculator to Understand Your Liabilities
If you are approaching the VAT registration threshold or have just registered, it is important to understand your potential VAT liabilities. Calculating VAT can be complex, as it involves knowing the tax-deductible expenses you can claim.
An easy way is to use the online VAT Calculator. It allows you to estimate the VAT registration threshold for your business based on the information you input. The calculator will factor in your projected turnover, and input tax deductions like purchases eligible for credits, expenses, markups, profit, and more.
Playing around with the VAT Calculator gives you a preview of how your tax liability might change post-registration. It also helps ensure you don’t underestimate or overpay VAT once registered.
Too often small businesses realize VAT registration pushes taxes higher than projected. Using our VAT Calculator can prevent unwanted surprises through better forecasting. You also gain clarity on tax-deductible business expenses to claim.
So be sure to take advantage of our VAT Calculator before finalizing your VAT registration. It only takes a few minutes but provides valuable financial planning insights.
How long does VAT registration on eFiling take?
The VAT registration process can take between 4-6 weeks from when you submit your completed VAT101 form and supporting documents to SARS. eFiling can speed things up compared to manual submission. You can get real-time updates on the status online.
What are the VAT thresholds for registration?
You are only required to register for VAT if your taxable supplies exceed R1 million in any consecutive 12-month period. Voluntary registration is possible even below this threshold though.
Can I register my business using the old VAT103 form?
No, since 2021 all VAT registrations must be completed using the updated VAT101 form. The VAT103 was phased out.
What supporting documents do I need for VAT registration on eFiling?
You typically need to submit documents that identify and prove you run a legitimate business. This includes things like financial statements, bank account statements, municipal accounts, lease or sale agreements tied to your company, and more.
Can I upload supporting documents from my phone?
Yes, eFiling allows you to conveniently use your mobile device to capture images or scans of supporting paperwork needed for VAT registration. This can save trips to SARS offices.
In conclusion, although end-to-end online VAT registration is not yet possible on the SARS eFiling platform, you can complete significant components digitally. eFiling allows taxpayers to submit Part A of the VAT101, communicate with SARS officials, upload electronic supporting documentation, and more. This saves time and effort compared to traditional manual processes. As eFiling capabilities expand over time, fully digital VAT registration should be possible in the future without needing to submit physical paperwork.