Cancellation of VAT registrations

Deloitte VAT department

03 April 2009

What is now permissible.

Cancellation of Registration
A vendor may apply for cancellation of registration if the value of taxable supplies falls below the limit of R1m in any consecutive period of 12 months. The Commissioner will also automatically deregister a vendor if:

 The enterprise closes down and will not commence again within the next 12 months; or

 The enterprise never actually commenced or will not commence within the next 12 months; or

 The person opts out of the VAT system and migrates to the Micro Business Turnover Tax.

Whether you want to voluntarily deregister, or your circumstances have changed so that you are no longer liable to be registered as a vendor, you should inform the Sars branch office where you are registered in writing of your situation. Further note that Sars cannot deregister you until all outstanding liabilities and obligations have been settled.

Vendors wishing to deregister voluntarily have two options. The first is to simply deregister from VAT as the value of taxable supplies is less than R1 million and the vendor no longer wishes to continue as a voluntary registrant. Alternatively, the vendor can apply to migrate to the Turnover Tax for micro businesses which require that the vendor deregister for VAT purposes. Some of the implications of these two options are discussed briefly below: