1. Question: A taxpayer exceeded the VAT threshold in 2024/2025 but only registered for VAT from January 2026. Can SARS apply VAT retrospectively, and what are the consequences?
2. Conclusion: Yes. SARS may backdate VAT registration to when the threshold was exceeded, and VAT, penalties, interest, and returns will be required for prior periods.
3. Explanation: In terms of section 23 of the VAT Act, where taxable supplies exceed R1 million in a rolling 12‑month period, VAT registration is compulsory. Section 64 provides that from the effective date of liability, all consideration received is deemed to include VAT. Output VAT must be declared on past supplies, even if VAT was not charged according to section 67. Penalties and interest could become payable, although voluntary disclosure relief and penalty waiver applications may be available. Subsequent registration does not negate liability for earlier periods.
4. Applicable legal provisions / guidance:VAT Act sections 23, 64, 67; Tax Administration Act (VDP provisions).