Tax and SARS knowledge base
Will SARS cancel VAT registration under the new threshold?
Will SARS automatically cancel my voluntary VAT registration if turnover is below R120 000?
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Direct answer
No, not without a process. From 1 April 2026, the voluntary VAT registration threshold increased to R120,000 a year and the compulsory threshold to R2.3 million, subject to the 2026 legislative process described by SARS. A vendor below the new voluntary threshold is not simply removed without notice.
SARS states that it will notify affected vendors of an intention to cancel after the legislation is promulgated. The vendor can agree or object through the prescribed dispute process.
What this means in practice
Continue filing VAT201 returns and meeting vendor obligations until SARS confirms a cancellation date and final tax period. Stopping returns because turnover is low can create penalties and compliance problems while the registration remains active.
If you want to remain registered, test whether your current and expected taxable supplies meet the new voluntary conditions or another exception. If cancellation proceeds, account for the final-period adjustments, including assets on hand and previously unclaimed input tax where permitted.
Step-by-step
- Confirm current VAT registration status on eFiling.
- Calculate taxable supplies for the relevant 12-month periods.
- Keep filing while registration remains active.
- Read any SARS intention-to-cancel notice and its deadline.
- Agree if the facts are correct, or lodge the prescribed objection with evidence.
- If cancelled, submit the final VAT201 and settle adjustments.
- Retain the cancellation notice and reconciliation.
Documents and records to keep
- VAT notice of registration.
- Monthly turnover and taxable-supply schedules.
- VAT201 returns and invoices.
- SARS cancellation notice and response.
- Final-period asset and input-tax reconciliation.
Important limits and exceptions
Total turnover is not always the same as taxable supplies. Grouping, connected persons, once-off disposals and voluntary-registration categories require careful treatment. Cancellation can trigger output tax on assets retained.
When to get tailored advice
Get advice before accepting cancellation if contracts quote VAT, large input claims remain or business turnover is expected to recover.