Compliance
SARS VAT Shopify Setup for South African Stores.
A correct SARS VAT Shopify setup is what separates a store that survives a SARS audit from one that owes hundreds of thousands in back-taxes. The rules are specific: 15 percent VAT on taxable supplies, mandatory VAT registration once 12-month turnover crosses R1 million (voluntary below that), consumer-facing prices must be VAT-inclusive under the Consumer Protection Act, and exports qualify for zero-rating only if you hold proof of export for five years. Shopify's default tax settings and the 'Automatic' tax option are not reliable for South Africa — manual configuration is required. This guide walks through VAT registration thresholds, Shopify tax settings, zero-rated exports, digital services rules, and the compulsory SARS tax invoice fields for orders over R5,000. None of this is legal or tax advice; verify with a registered SA tax practitioner before filing.
Prerequisites
- SARS eFiling profile for your business entity (Pty Ltd, sole prop, etc.)
- Clear view of your rolling 12-month taxable turnover — you must register once it exceeds R1m
- VAT number once registered (mandatory on your tax invoices and Shopify settings)
- Shopify store with products priced in ZAR
- Separate accounting workflow — Xero, Sage or QuickBooks synced to Shopify for VAT returns
Step 1. Confirm whether you must register for VAT
Compulsory registration kicks in when your taxable turnover exceeds R1,000,000 in any rolling 12-month period, or when you reasonably expect to exceed it in the next 12 months. Voluntary registration is allowed from R50,000. If you are below the threshold and not registered, do not charge VAT on your invoices — doing so is itself an offence.
Step 2. Register for VAT on SARS eFiling
Log in to eFiling, choose Maintain SARS Registered Details > VAT 101 application, and submit. SARS may request supporting docs (bank statements, sales history). Registration takes 2 to 21 business days. Once approved you receive a VAT number starting with 4.
Step 3. Add your VAT number to Shopify
In Shopify admin, go to Settings > Taxes and duties > South Africa, add your VAT registration number, and set the South Africa tax rate to 15 percent. Save before moving on.
Step 4. Set prices to include VAT
For consumer-facing stores, the Consumer Protection Act requires prices to be displayed inclusive of VAT. In Shopify go to Settings > Taxes > 'All prices include tax' and toggle ON. Product prices in admin are then treated as VAT-inclusive and Shopify backs out the 15 percent on tax invoices.
{
"Settings > Taxes and duties": {
"Country: South Africa": {
"rate_percent": 15,
"tax_included_in_prices": true,
"shipping_taxable": true
}
}
}Step 5. Handle B2B tax-exclusive variants
If you sell B2B, some customers need tax-exclusive prices and tax shown separately. Set up a separate B2B Shopify catalog or use customer groups with tax-exclusive pricing and Net-14 terms. Never mix B2B and B2C pricing on the same storefront without clear labeling — CPA violations follow.
Step 6. Configure zero-rated exports
Direct exports (you ship the goods outside SA using a verified courier) qualify for zero-rating. You must hold proof of export — waybill, commercial invoice, and customs documentation — for 5 years. In Shopify, create a tax override on the Rest of World zones and set it to 0 percent. Collect a shipping address outside SA before zero-rating, not after.
Shopify > Settings > Taxes and duties > Tax overrides
Collection: All products
Country: Rest of World (exclude South Africa, Lesotho, Eswatini, Namibia, Botswana)
Tax rate: 0%
Reason note: Zero-rated direct export per VAT Act s.11(1)(a)Step 7. Include compulsory tax invoice fields
For orders of R5,000 or more, a full tax invoice must include: the words 'Tax Invoice', supplier name and address, supplier VAT number, customer name and address, customer VAT number (if registered), invoice number, date, description of goods, quantity, VAT amount shown separately, and total amount. Shopify's default invoice template lacks a few of these — edit your Order Printer or Order Printer Pro template to add them.
Step 8. Understand digital services and imports
Non-resident suppliers of digital services to SA customers must register for VAT in SA once they cross R1m. If you use a non-resident SaaS (e.g. a US app) that charges VAT, keep that invoice — you can claim input VAT. For imported goods, VAT is paid to SARS at the border; your clearing agent issues a BOE (Bill of Entry) which is the input VAT document.
Step 9. File your VAT return
Filing is every 2 months for most vendors (Category A or B), monthly for large businesses (Category C). Returns and payment are due by the 25th of the month following the tax period. Use your accounting tool to pull output VAT (sales) and input VAT (purchases) and submit on eFiling.
SA gotchas
- Shopify's Automatic tax for South Africa is unreliable — it misses zero-rated exports and sometimes applies VAT to shipping incorrectly. Manually configure the rate at 15 percent and add tax overrides yourself.
- Zero-rated export proof must be held for 5 years. If SARS audits and you cannot produce the BOE or tracking waybill, the output VAT becomes payable retroactively plus penalties.
- Consumer-facing prices must be VAT-inclusive. Adding VAT at checkout on a B2C store is a Consumer Protection Act breach.
- Voluntary registration below R50k turnover is not allowed. Check the threshold before applying.
- The R5,000 threshold for a full tax invoice is by order total, not line item. Most ecommerce carts sit under it, but wholesale and B2B carts cross it — template your invoices for both cases.
- SACU countries (Lesotho, Eswatini, Namibia, Botswana) have their own VAT regime and are not automatically zero-rated — check the current SARS guidance before zero-rating shipments there.
Frequently asked questions
Do I have to charge VAT on Shopify if I am below R1m turnover?
No. You must not charge VAT unless you are registered. Issue invoices without VAT, and keep a close eye on your rolling 12-month turnover as you approach R1m.
Are shipping fees subject to VAT in South Africa?
Yes, shipping charged to a customer is a taxable supply and attracts 15 percent VAT. Shopify taxes shipping at the same rate as products when the toggle is enabled.
Can I zero-rate a sale to a tourist buying in my store?
Only under the VAT Refund Administrator scheme — the tourist claims the refund on departure, not the retailer. You still charge VAT at point of sale.
What if I sell digital products to SA customers from abroad?
Non-resident suppliers of electronic services to SA consumers must register for VAT in SA once they cross R1m. Shopify itself handles this for its own subscription fees; for your products you need your own compliance path.
How do I claim input VAT on imports?
Your clearing agent issues a SARS Bill of Entry (BOE or SAD 500). That document is your input VAT claim — keep it for 5 years and include it in the return for the period the BOE is dated.