South Africa's Revenue Service issued guidance requiring schools registered under the South African Schools Act to deregister from VAT following legislative changes that exempted all school supplies from VAT effective 1 January 2026, with schools submitting a VAT123e cancellation form to SARS and potentially owing exit VAT.
The South African Revenue Service (SARS), in a media release dated 7 August 2026, urged schools registered under the South African Schools Act that are currently VAT vendors to apply for cancellation of their VAT registration following legislative changes to the VAT treatment of schools effective 1 January 2026.
From that date, all supplies made by schools are exempt from VAT, except to the extent that a school conducts qualifying welfare activities. Schools may therefore not charge VAT or deduct input tax on supplies made from 1 January 2026 and must correct any VAT returns already submitted for periods from that date where necessary.
Affected schools must complete the VAT123e – Application for the cancellation of registration form and indicate the reason for cancellation as: “All enterprise activities have ceased on 31 December 2025”. The completed form must be emailed to contactus@sars.gov.za with the subject line: VAT deregistration – Schools.
Alternatively, schools may make a virtual appointment via the SARS eBooking system by selecting “Other” as the reason category and “VAT and PAYE registration/deregistration” as the reason for appointment.
Where exit VAT is payable, schools may submit a request for payment arrangements together with the VAT123e form. SARS will cancel the VAT registration once the exit VAT has been declared and paid, or after the school has complied with the payment arrangement that was agreed with SARS.
Schools that wish to remain registered as VAT vendors in respect of qualifying welfare activities must obtain written confirmation from the Commissioner by way of a ruling.
Further guidance is available on the SARS website in the:
- VAT Reference Guide – Schools Exiting the VAT System; and
- Schools Exiting the VAT System: Frequently Asked Questions.
