Should this client deregister for VAT, what will the once-off exit VAT cost, and how is the VAT123e completed? Work through the steps below — everything recalculates as you type. Everything you enter stays in your browser — nothing is sent to us or anyone else. General information, not tax advice: the exit-VAT rules have exceptions that depend on your facts, so confirm the outcome with a registered tax practitioner before acting.
Why we ask — these details fill the VAT123e word-for-word in the completion guide at step 7.
Why we ask — a vendor may apply to deregister when the value of taxable supplies for a 12-month period is below the compulsory registration threshold.
Enter both turnover figures to run the test.
Why we ask — on deregistration the enterprise is deemed to supply the assets it keeps, and output VAT is payable on their deemed value. List every enterprise asset still on hand at the deregistration date.
| Description | Category & rate | Date bought | Cost price (R) | Suggested value today | Deemed value today (R) | Input VAT claimed at purchase? | Include? | Note |
|---|
Per line the calculator includes the lesser of cost and deemed value (s10(5)). Rows where input VAT was not claimed at purchase are excluded automatically — confirm that treatment before filing.
Why we ask — trading stock still on hand at the deregistration date is also deemed to be supplied. Enter the latest stocktake at the deregistration date line by line, grouped under brand / range headings — rows that share a group heading are subtotalled together.
| Group / heading | Description | Qty | Unit selling price (R) | Line selling value | Line cost (R, optional) | Deemed line value | Note |
|---|
Where a line has its own cost: deemed value = lesser of cost and selling value. Where it has none: deemed value = lesser of (selling value × the cost percentage) and the selling value.
Optional — fixed property, goodwill / customer lists, work in progress, anything else the enterprise keeps. The same lesser-of rule is applied here, but the VAT treatment of these items needs a practitioner’s judgement — confirm each line before filing.
| Description | Cost (R) | Value today (R) | Deemed consideration (lesser) | Note |
|---|
On deregistration, output VAT must be accounted for on amounts still owed to creditors on which input VAT was claimed in the 12 months before deregistration (and a general rule taxes any creditor unpaid 12 months after due date). VAT = amount × 15/115. Practical tip — pay creditors down before the deregistration date to avoid this charge.
| Creditor / description | Amount owed (R) | VAT thereon (15/115) |
|---|
The total deemed value goes into block B of the VAT123e. The exit VAT itself is declared on the final VAT201 — it is not paid with the VAT123e.
Add the assets and stock the enterprise will keep to estimate the exit VAT.
Exit VAT = 15/115 of the lesser of (a) the VAT-inclusive cost and (b) the open market value of the goods on the day of ceasing to be a vendor — section 8(2) read with section 10(5) of the VAT Act.
Warning: some published guides calculate a flat 15% on the value (e.g. R150 000 → R22 500). The Act deems the value to be consideration including VAT, so the correct output tax is R150 000 × 15/115 = R19 565,22. This tool uses the statutory tax fraction.
Accounting Connect handles VAT deregistrations end to end — the application, the valuations and the final return.
Book a callA field-by-field walk-through of the actual form, filled live from what you entered above. Copy each value onto the form exactly as shown.
The VAT123e is dated 2009 and still prints “R1 million” in the reason blocks. The law now sets the compulsory registration threshold at R 2 300 000 (1 April 2026 — Budget 2026). Complete the form with the true figures and attach a covering note quoting the current threshold.
SARS in any case requires the circumstances giving rise to the cancellation to be clearly stated on the form or in a separate covering letter attached to it — so a short covering / motivation letter is effectively part of the submission pack.
| This calculator’s figure | Goes where | When |
|---|---|---|
| Preceding 12-month taxable supplies | VAT123e reason block — the R boxes | At application |
| Expected next 12 months | Covering letter | At application |
| Total deemed value of assets retained | VAT123e block B | At application (estimate) |
| Re-valued deemed total at the day before the effective date | Final VAT201 field 1A — deemed value × 15/115 | Only after SARS’s cancellation notice |
| Exit VAT amount | Paid with the final VAT201 (or an instalment arrangement of up to 6 months) | Final period due date |
The biggest client misconception: people think you pay to deregister when you apply. In fact nothing is payable on application — the exit VAT is declared and paid only in the final VAT201, after SARS has approved and set the final tax period.
SARS auto-rejects if anything is outstanding: every VAT201 filed and paid, income tax returns up to date, no tax debt, and the registered representative and contact details current on eFiling. SARS makes verification calls — a missed call stalls the application.
Gather: this calculator’s printed summary · the asset register with current market values · the latest stocktake · 12 months of bank statements (supports the turnover figures) · a certified ID of the owner (sole proprietors), or CIPC registration documents plus certified IDs of all directors / members (companies and CCs) · the completed VAT123e · a covering letter stating the circumstances (required — on the form or attached) quoting the current R2 300 000 threshold (effective 1 April 2026).
Submit the VAT123e + covering letter via the SARS branch where the vendor is registered (or an eBooking virtual appointment: category “Other” → “VAT and PAYE registration/deregistration”, or the practitioner channel). You pay nothing now — there is no amount payable with the application.
Target ±21 business days; verification can stretch it. You are still a vendor. Keep charging 15% VAT on every sale, keep issuing tax invoices, keep filing every VAT201 that falls due, keep claiming input VAT. The classic mistake is stopping VAT on the day of application — do not.
A cancellation notice arrives stating the effective date and the final tax period. Only SARS sets these — not the application.
Do the final stocktake and re-value the assets on that day — come back to this calculator and update the values; they will have moved since application. This is the figure the law taxes.
Normal trading figures for the final period plus the exit VAT on the assets and stock retained, entered in field 1A (output tax on capital goods and deemed supplies). File by the period’s normal due date.
Where the vendor deregisters because taxable supplies for the preceding 12 months were below the registration threshold — this tool’s main scenario — the VAT Act itself allows the exit VAT to be paid to SARS within 6 months of deregistration (proviso to section 8(2)). Confirm the payment arrangement with SARS when the final return is filed; deregistrations on other grounds don’t get this relief. Late payment attracts penalties and interest.
Stop charging VAT, remove VAT from invoices and displayed prices, and keep all VAT records for 5 years. Invoice-basis vendors: VAT on outstanding debtors was already declared when invoiced — nothing further when they pay. (Payments-basis vendors differ — practitioner to check.)
Client-friendly answers to the questions that come up every time.
The form as it should read, filled live from the figures above — print it and transcribe onto (or check against) the official SARS form.
Working proof for transcription and checking only — the application itself is made on the official SARS VAT123e.
From the SARS VAT 404 guide — run through before anything is submitted.