Cancellation of VAT registration (Deregistration)

A vendor’s VAT registration may be cancelled by the Commissioner or on written request by the vendor, if certain requirements are met.

What are the reasons to cancel a VAT registration?

A vendor may apply in writing for cancellation of a VAT registration where the value of taxable supplies will be less than the compulsory registration threshold of R1 million in any consecutive period of 12 months.

The Commissioner may cancel a VAT registration where –

• the vendor has ceased to carry on the enterprise and will not commence again within the next 12 months;
• the enterprise never actually commenced or will not commence within the next 12 months;
• the vendor no longer complies with the requirements for compulsory or voluntary registration;
• the vendor has failed to furnish a return that is required for purposes of calculating the VAT, or
• the vendor was registered under a voluntary registration and –
  • has not fixed place of abode or business;
  • does not keep proper accounting records;
  • has not opened a bank account in respect of the enterprise; or
  • was previously registered under the VAT Act or Sales Tax Act and failed to perform any duty imposed under those Acts.

Where a vendor has ceased all enterprises, the cancellation normally takes effect from the last day of the tax period in which the vendor ceased to carry on all enterprises. However, the Commissioner may determine the effective date to be another date.

Any of a vendor’s separately registered enterprises/divisions/branches may also be cancelled if –

• the vendor applies in writing;
• the main registration is cancelled (in which case, all the branch registrations will be cancelled); or
• it appears to the Commissioner that the duties under the VAT Act or the Tax Administration Act have not been carried out properly.

The effect of the cancellation of a branch registration is that all duties revert to the main registration.

Top Tip: SARS cannot finalise a cancellation of registration as a VAT vendor until all the outstanding liabilities and obligations in terms of the VAT Act have been resolved or settled. 

How to cancel a VAT registration

1. Complete a VAT123e – Application for the cancellation of registration of a person in respect of all his enterprises form. Use the VAT123T to apply for the cancellation of a separately registered enterprise.
2. Make a virtual appointment via our eBooking system by selecting the following options:

• • Appointment channel: Telephonic engagement or Video

• Reason category: Other

• • Reason appointment: VAT registration

The application for cancellation form must be submitted to the SARS branch where the vendor is registered. The circumstances that give rise to the cancellation must be clearly stated on the form or in a separate letter attached thereto.

A vendor must continue to charge VAT on supplies made and account for output tax and deduct any input tax up to the last day of the final tax period as was advised by the Commissioner. Late payment of VAT will attract penalty and interest.

The Commissioner will issue a notice of cancellation of registration which will also inform the vendor of the date on which the cancellation takes effect and the final tax period.

In respect of the final tax period (as indicated by the Commissioner), the vendor must declare output tax in field 1A of that VAT return.

Output tax on certain assets on hand at date of ceasing to be an enterprise must be declared together with any other output tax and input tax in the VAT return for that final tax period.

How to reactivate a VAT number

In order for a VAT number to be reactivated at SARS, a person must still meet the requirements of an enterprise as defined in the VAT Act. All required supporting documents together with the date and reason(s) for the reactivation request must be provided to SARS.  Refer to the “How to register for VAT” page for further information in this regard.