the process of registering a business with SARS, highlighting professionalism and tax compliance in South Africa
The process of registering a business with SARS, highlighting professionalism and tax compliance in South Africa


Registering your business with the South African Revenue Service (SARS) is an essential step in ensuring legal compliance and positioning your company for growth. SARS registration allows businesses to fulfill their tax obligations, access tax benefits, and gain credibility with customers and stakeholders. This guide provides a step-by-step overview of how to register a business with SARS and maintain tax compliance.

1. Why Register a Business with SARS?

Registering with SARS is mandatory for all businesses operating in South Africa. Benefits of SARS registration include:

  • Legal Compliance: Avoid penalties for tax evasion or non-compliance.
  • Access to Tax Benefits: Registered businesses can claim VAT input credits, deductions, and rebates.
  • Business Credibility: Clients and suppliers prefer working with tax-compliant businesses.
  • Eligibility for Contracts and Loans: Many tenders and financial institutions require proof of tax compliance.

2. Registration Requirements

Before registering your business with SARS, ensure you have the following:

  • Business Registration Number: Issued by the Companies and Intellectual Property Commission (CIPC) if your business is formally registered.
  • Identity Document: A valid South African ID or passport for the business owner(s).
  • Proof of Address: Recent utility bills or lease agreements not older than 3 months.
  • Bank Account Details: A business bank account is preferred but not mandatory for sole proprietors.
  • Contact Details: A valid email address and phone number for correspondence.

3. Key Taxes for Businesses

The type of taxes you register for depends on your business activities and turnover. These include:

  • Income Tax: Applicable to all businesses for declaring profits and losses.
  • Value-Added Tax (VAT): Required if your business turnover exceeds R1 million annually.
  • Pay-As-You-Earn (PAYE): Applicable if you employ staff and deduct taxes from their salaries.
  • Provisional Tax: For businesses that don’t receive a regular monthly income.
  • Customs and Excise Duties: For businesses involved in importing or exporting goods.

4. Step-by-Step Guide to Registering Your Business with SARS

Step 1: Create an eFiling Profile

SARS eFiling is the online platform used for tax registration and submissions.

  1. Visit the SARS eFiling website.
  2. Click on “Register” and select the appropriate taxpayer type (individual or company).
  3. Provide your personal details, including ID number, email address, and phone number.
  4. Set up a secure username and password.

Step 2: Register for Income Tax

If you registered your business with CIPC, SARS automatically registers it for income tax. For sole proprietors and informal businesses:

  1. Log into your SARS eFiling profile.
  2. Navigate to the “Tax Types” section and select “Income Tax.”
  3. Complete the online application form with your business details.
  4. Submit the form and await confirmation of your tax reference number.

Step 3: Register for VAT (if applicable)

If your business turnover exceeds R1 million annually, VAT registration is mandatory. Voluntary registration is allowed for businesses with turnover exceeding R50,000.

  1. Log into SARS eFiling.
  2. Navigate to “Manage Tax Types” and select “VAT.”
  3. Complete the VAT registration form, providing turnover details and proof of business activities.
  4. Submit supporting documents, such as invoices or contracts, to verify turnover.
  5. Await your VAT registration number.

Step 4: Register for PAYE

If you employ staff, you must register for PAYE.

  1. Log into your eFiling profile.
  2. Select “EMP201” under the “Returns” tab to register as an employer.
  3. Provide details of your employees and payroll system.
  4. Once registered, you’ll need to file monthly PAYE returns and remit deductions to SARS.

Step 5: Register for Provisional Tax

Provisional tax applies to businesses that don’t have a fixed monthly income.

  1. Log into SARS eFiling.
  2. Select “Provisional Tax” under the “Tax Types” section.
  3. Complete the form and submit.

Step 6: Customs and Excise Registration (if applicable)

For businesses involved in importing or exporting goods:

  1. Visit the SARS customs office to collect and complete the registration forms.
  2. Provide business details, import/export licenses, and proof of business activities.
  3. Submit the forms and await approval.

5. Maintaining Tax Compliance

Once registered, ensure ongoing compliance by:

  • Submitting Returns on Time: File income tax, VAT, and PAYE returns as per SARS deadlines.
  • Paying Taxes Promptly: Avoid interest and penalties by paying taxes by the due date.
  • Keeping Accurate Records: Maintain detailed records of income, expenses, and transactions.
  • Updating Details: Notify SARS of any changes in business structure, address, or contact details.

6. Penalties for Non-Compliance

Failing to register or comply with SARS regulations can result in:

  • Fines and penalties for late submissions or payments.
  • Legal action, including business closure.
  • Reputational damage and loss of client trust.

7. Accessing SARS Support

If you encounter challenges during registration or compliance, SARS offers several support channels:

  • SARS eFiling Helpdesk: Call 0800 00 SARS (7277) for assistance.
  • Taxpayer Education Workshops: Available at SARS branches nationwide.
  • SARS Website: Access resources and guides at www.sars.gov.za.

8. Conclusion

Registering your business with SARS is a critical step in ensuring compliance, accessing tax benefits, and building a credible enterprise. By following the steps outlined in this guide and maintaining ongoing compliance, you can position your business for long-term success. Remember, tax compliance is not just a legal obligation—it’s a foundation for sustainable business growth.