VAT-Registered Schools: SARS Clarifies the Exit Process

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Schools that were previously registered for VAT are facing significant changes following amendments to the VAT Act that took effect on 1 January 2026. To assist affected institutions, SARS has published a comprehensive set of Frequently Asked Questions (FAQs) explaining how schools must exit the VAT system and what obligations remain.

Why are schools leaving the VAT system?

The Taxation Laws Amendment Act introduced changes that make all supplies by schools exempt from VAT from 1 January 2026. As a result, schools generally no longer carry on a taxable enterprise for VAT purposes and may not remain registered as VAT vendors. An exception applies to schools that qualify as welfare organisations and conduct approved welfare activities under a VAT ruling.

Deregistration is not automatic

One of the key points clarified by SARS is that schools are not automatically deregistered. Schools must apply to SARS for VAT deregistration, and SARS will communicate the process, forms and supporting information required.

What happens if VAT was charged after 1 January 2026?

Some schools may have continued charging VAT after the effective date. SARS confirms that any VAT charged on supplies made on or after 1 January 2026 must still be declared and paid over to SARS through the relevant VAT201 return. Schools cannot simply retain the VAT collected from customers.

Where schools wish to refund VAT incorrectly charged to parents or other customers, specific correction procedures apply and supporting documentation may be required.

Final VAT obligations remain important

Although schools ceased making taxable supplies from 1 January 2026, deregistration does not remove the obligation to deal with outstanding VAT matters. Schools must ensure that all required returns are submitted and any VAT liabilities are settled as part of the deregistration process. SARS will determine the final tax period and confirm the effective date of cancellation.

What accountants should do

Accountants acting for schools should review whether their clients remain VAT-registered, determine whether VAT was charged after 1 January 2026, and prepare for the deregistration process. Particular attention should be given to correcting VAT charged in error, maintaining supporting documentation, and ensuring that final VAT returns are submitted accurately.

The SARS FAQs provide practical guidance on a transition that affects many independent and public schools. Practitioners with school clients should familiarise themselves with the requirements to ensure a smooth and compliant exit from the VAT system.