Starting April 1, 2026, what exactly has changed regarding the eligibility requirements?

The South African Revenue Service (SARS) announced in the budget on February 25, 2026, and Effective April 1, 2026 The adjustments are as follows:

• Mandatory VAT Registration Threshold:1 million rand → 2.3 million rand
• Voluntary Registration Requirements:50,000 rand → 120,000 rand
• VAT Rates:Maintain 15%
• Turnover Tax Threshold: Raised Simultaneously to 2.3 million rand, tax-exempt amount 600,000 rand

For new sellers, this represents a significant reduction in their burden: if their annual taxable supply is less than 2.3 million rand, they are no longer required to register as VAT suppliers, nor are they required to file monthly returns.

However, ”can be refunded” does not mean ”should be refunded.” While the threshold has been raised,VAT costs at the import stage are actually rising...These two things must be considered together.

The duty-free benefit for small packages has come to an end

The change in the other line is more abrupt:

• Starting in September 2024, the State Administration of Taxation (SARS) will begin implementing the cancellation of the VAT exemption for low-value imported goods in practice;Taxation Laws Amendment Act of 2026 Formally cancel thisEnacted into law
• SARS Cancelled More than 140 items Import Tax Exemptions and Reductions,End of Duty-Free Benefits for Small Packages Weighing Less Than R500, uniformly changed to ”Customs Duty + 15% VAT” (official announcement number to be verified)
• Import VAT is calculated based on ATV = FOB + 10% upward adjustment + tariffs Tax Assessment

Section 38(1)(a)(v) of the Customs Act provides that goods with an FOB value of 500 rand or less that are classified as duty-free under Schedule 1 are exempt from formal customs declaration; however,This generally does not apply to B2B commercial shipments.This provision. In other words, sellers who ship large volumes through platforms such as Takealot will find it difficult to continue relying on this exemption.

Note the Tax Base for ATVs: Instead of simply multiplying the FOB price by 15%, you should first adjust it upward by 10% and then calculate the total after adding the tariff. Many sellers overlook this step when estimating costs, resulting in a higher-than-expected tax burden.

Should You Cancel Your Registration? Four Factors to Consider

When deciding whether to cancel a VAT registration number, we recommend following these steps:

1. Do you have any B2B customers?: Corporate buyers typically require VAT invoices for input tax credits; if you are not registered for VAT, you will immediately lose out on such orders.
2. Is Import VAT Deductible?: If imports are ongoing and the goods have already been sold in South Africa, the 15% paid at the time of import after VAT registration is deductible; if not registered, this amount is considered a pure cost.
3. Platform requirements: Some platforms and local warehouses have requirements regarding sellers' tax status; please refer to the platform's rules for details.
4. Reported Cost: Retaining a tax ID number entails a monthly or bimonthly filing obligation and requires local accounting support.

A simple way to tell:If the annual amount of import VAT exceeds the cost of filing and maintaining the tax ID, it is usually more cost-effective to retain the tax ID.The

Recommendations for Handling Three Typical Scenarios

Conclusions vary greatly depending on the business model, so first determine which category you fall into:

• Pure cross-border direct shipping, with annual sales of less than 2.3 million rand: Registration is not mandatory for now, but you need to confirm whether the platform will approve it, and include the 15% import VAT in the CIF cost.
• Fulfilled via a local warehouse/platform (FBT): Since ownership of goods and sales primarily take place within South Africa, companies tend to retain their VAT numbers to ensure the integrity of the input tax chain.
• B2B and B2C in Parallel: We recommend retaining your tax ID number and issuing compliant tax invoices to B2B customers, using the tax credits to offset reporting costs.

Two Pitfalls to Avoid

• Mistakenly believing that raising the threshold is equivalent to tax exemption: 2.3 million rand is the registration threshold, not a tax-exempt amount; amounts exceeding this threshold must still be fully registered and reported retroactively.
• Failure to Address the Transition Provisions for the Turnover Tax: The threshold has been raised to 2.3 million rand, with a tax-free allowance of 600,000 rand. Micro and small businesses may choose between the Turnover Tax and VAT, but the two cannot be applied simultaneously; they must calculate their actual tax burden before switching.

It should be emphasized that the above rules pertain to specific effective dates and announcement numbers,Before proceeding, please refer to the official SARS announcements and the latest guidelines.The

Qicaiying has a local team in South Africa specializing in company registration, VAT registration, and monthly filings. The team can assist sellers with applying for tax ID numbers, reviewing import VAT credits, and calculating tax liabilities related to registration and deregistration. Specific recommendations will be tailored to the seller’s sales structure and customer profile.