The South African Revenue Service (SARS) has instructed schools registered as VAT vendors to formally apply for the cancellation of their VAT registration.
These instructions follow changes to how schools are treated regarding VAT, which became effective on January 1, 2026. Under the South African Schools Act, all services provided by schools are now exempt from VAT, unless the school engages in specific qualifying welfare activities.
Consequently, starting from January 2026, schools are prohibited from charging VAT on these supplies and cannot claim input tax deductions for associated expenditures.
The revenue service emphasized that the deregistration procedure is not automatic; affected schools must actively apply for the cancellation. They are required to fill out the VAT123e – Application for the cancellation of registration form and specify the reason as: “All enterprise activities have ceased on 31 December 2025”.
This completed form must then be sent via email to contactus@sars.gov.za with the subject line: VAT deregistration – Schools. Alternatively, schools have the option to schedule a virtual appointment through the SARS eBooking system, selecting “Other” as the reason category and “VAT and PAYE registration/deregistration” for the appointment reason.
Furthermore, SARS noted that if any exit VAT is due, schools can submit a request for payment arrangements alongside the VAT123e form. The VAT registration will only be canceled after this exit VAT has been declared and paid, or once the school adheres to the agreed-upon payment plan with SARS.
For those schools that wish to maintain their status as VAT vendors specifically for qualifying welfare activities, they must secure written confirmation from the Commissioner in the form of a ruling.
