In mid-June, the South African Revenue Service (SARS) published a VAT reference guide explaining the VAT consequences for schools in South Africa that will no longer be VAT vendors as of January 1, 2026, due to amendments to the VAT Act. The guide helps schools understand how the law applies when they deregister for VAT. It also helps them determine which assets connected to their enterprise activities may still be subject to VAT upon ceasing to be vendors.

The Scope of the VAT Guide

The guide is based on the legal framework in force, including the amendments introduced through the Taxation Acts Amendment Act 5 and the Tax Administration Acts Amendment Act 4, both enacted on April 1, 2026. Specifically, the guide provides practical clarity on how schools should assess whether VAT becomes payable on assets or goods connected to their enterprise activities at the time of deregistration.

However, the guide does not cover the administrative or operational procedures linked to deregistration, such as the formal process for cancelling VAT registration, declaring liabilities, or arranging payment with SARS. These procedures will be explained separately in a Frequently Asked Questions (FAQs) document entitled “Schools Exiting the VAT System,” which will be published on and updated via the SARS website.

Notably, the VAT guide for schools exiting the VAT system is divided into five chapters: an introduction; an overview of the main principles, concepts, and implications of the legislative amendments; application of key provisions; input tax deductions before VAT deregistration; and transitional and miscellaneous VAT provisions.

Conclusion

The SARS VAT guide for schools clarifies important legal and tax terms in South African legislation and common law, helping schools to identify whether certain property, goods, or other items are considered enterprise assets for VAT purposes. Additionally, the guide provides a key question for schools: “Did they deduct VAT, wholly or partly, on this item because it was used for taxable supplies?” If the answer is yes, such an item falls under the scope of the new VAT rule.