SARS must pay a VAT refund within 21 business days of receiving a correctly completed VAT return. If it does not, SARS must pay interest at the prescribed rate — currently 10.25% per annum. But there are specific circumstances in which SARS may withhold a refund or suspend that 21-day clock without paying interest, and almost every delayed refund traces back to one of them.
The 21-day rule is genuinely enforceable. The problem is that "correctly completed" is doing a lot of work in that sentence, and most delayed refunds are delayed by something the vendor controls.
TL;DR
21 business days from receipt of a correctly completed return.
Late payment means SARS owes interest at 10.25% per annum.
Five grounds allow SARS to withhold a refund.
Four circumstances restart the 21-day clock — and no interest runs while it does.
Refunds are set off against any outstanding tax debt first.
You have 5 years to claim a refund on a return.
When SARS may withhold a refund
SARS may withhold a refund until:
1. A defective or incomplete return is resolved. Either SARS satisfies itself that the defect does not affect the amount refundable, or you correct it.
2. Banking details have been provided. No verified banking details, no payment.
3. All outstanding returns have been submitted. This catches vendors constantly — an outstanding EMP201 from eighteen months ago will hold up a VAT refund today, because the requirement is all outstanding returns, not just VAT ones.
4. SARS is satisfied about pass-through arrangements. Where the vendor's output tax is borne by another party and the refund would need to be passed on.
5. A verification, inspection or audit has been finalised — unless acceptable security has been provided.
That fifth ground is the one that matters most in practice. Any refund can be selected for verification, and the clock stops while it runs.
The four things that restart the clock
Separately from withholding, the 21-business-day period is recalculated where:
The VAT return is incomplete or defective
Banking details are incorrect
Tax returns are outstanding
For a non-resident vendor, a representative vendor has not been appointed or a bank account has not been furnished
And the period is suspended where SARS is unable to gain access to your books and records — running from the date the access request is sent until the date you allow access.
The practical consequence: interest is not payable while the clock is recalculated or suspended. So a refund that takes four months because your banking details were wrong earns you nothing.
Working out why yours is delayed
Run through these in order.
1. Are all your returns filed? Every tax type, every period, including nil returns. Check eFiling for outstanding items. This is the most common cause and the easiest to fix.
2. Are your banking details correct and verified with SARS? Not correct at the bank — correct at SARS. A changed account that was never updated stops everything.
3. Have you been selected for verification? Check the eFiling correspondence inbox and the Refund Dashboard. A verification letter with a 21-business-day response deadline may be sitting unopened.
4. Do you owe SARS anything on another tax type? A refund is set off against outstanding debt before any balance is paid out. A R180,000 VAT refund against a R60,000 PAYE arrear pays you R120,000.
5. Is your tax compliance status clean? Non-compliance is closely linked to the grounds above.
6. Is the return actually correct? An arithmetic error or an obviously wrong field will hold it.
The eFiling Refund Dashboard
Vendors registered for eFiling can view the status of a VAT refund on the Refund Dashboard. Check it before phoning — it usually tells you which stage the refund is at and whether documents have been requested.
How to get it moving
If returns are outstanding: file them. All of them, including nil returns. This alone releases a large share of stuck refunds.
If banking details are the issue: update them with SARS. This requires supporting documents and is done through eFiling, or via a virtual appointment booked through SARS eBooking. Expect it to take time — this is not a same-day fix, which is why it is worth keeping current.
If you are under verification: respond completely and on time. Upload everything in one submission, correctly named. See how to respond to a SARS verification request.
If a debt is being set off: that is correct procedure. Deal with the underlying debt.
If none of the above applies and 21 business days have passed: escalate. SARS has a complaints process, and beyond it the Office of the Tax Ombud deals with service failures. The Ombud will generally require you to have exhausted SARS's own complaints process first.
The interest SARS owes you
If a refund is not paid within 21 business days, SARS must pay interest at the prescribed rate on the refundable amount. From 2 March 2026 the rate for a VAT refund paid after the prescribed period is 10.25% per annum.
But SARS may recalculate or suspend the 21-day period in the circumstances above, and no interest is payable during a suspension — unless the recalculated or suspended period itself lapses.
In practice: interest is real where the delay is SARS's, and rarely available where the delay is traceable to something in your control.
Reducing how often this happens
File everything, including nil returns. The single highest-return habit. An outstanding return on any tax type can hold a refund on another.
Keep banking details current at SARS, not just at the bank. Update them when you change accounts, not when a refund is stuck.
Expect verification on refunds. Have the input VAT listing reconciling to field 19 ready before you file, not after the letter arrives.
Check invoices at receipt. A verification that finds defective invoices turns a delay into a disallowance.
Consider monthly VAT filing if you are permanently in a refund position. Exporters, manufacturers and businesses in a capital investment phase can apply to move to Category C monthly filing, which gets cash back twice as often. The request must be made at a SARS branch via an eBooking appointment.
The five-year limit
A refund on a return must be claimed within five years from the date the return was due. An erroneous overpayment must be claimed within five years from the date of the overpayment.
For a refund arising from an erroneous overpayment, you must provide SARS with banking details within 90 days of making the claim for it to be valid.
Frequently asked questions
How long does SARS take to pay a VAT refund? SARS must pay within 21 business days of receiving a correctly completed VAT return. If it does not, interest is payable at the prescribed rate, currently 10.25% per annum. However, SARS may withhold the refund or recalculate the 21-day period in defined circumstances.
Why is my VAT refund being withheld? The five grounds are: a defective or incomplete return, banking details not provided, outstanding returns on any tax type, unresolved questions about pass-through arrangements, or an unfinalised verification, inspection or audit.
Does SARS pay interest on a late VAT refund? Yes, at the prescribed rate — 10.25% per annum from 2 March 2026 for a VAT refund paid after the prescribed period. But no interest accrues while the 21-business-day period is validly suspended or recalculated.
Can SARS use my refund to pay other tax I owe? Yes. Where a vendor has an outstanding debt, the VAT refund is set off against it and only the balance is paid out.
How do I check the status of my VAT refund? Vendors registered for eFiling can view refund status on the eFiling Refund Dashboard, which usually shows which stage the refund is at and whether supporting documents have been requested.
How long do I have to claim a VAT refund? Five years from the date the return was due. For an erroneous overpayment, five years from the date of the overpayment, and banking details must be supplied within 90 days of the claim for it to be valid.
What can I do if SARS will not pay and I have done everything right? Escalate through the SARS complaints process, and if that fails, approach the Office of the Tax Ombud, which handles service-related failures. The Ombud generally requires SARS's internal complaints process to be exhausted first.
Can I use someone else's bank account for a VAT refund? Only in two situations: where the vendor is a foreign company, or where the vendor falls within a group of companies as a subsidiary or holding company. Both require authority from the account holder and a completed VAT119i indemnity form.
Refunds that arrive on time
The vendors who get paid in three weeks are not treated differently. They simply have every return filed, banking details current, and the input VAT listing ready before the verification letter arrives.
Smartbook keeps returns current across every tax type, files VAT201s with the supporting schedule prepared, and handles verification responses so refunds are not sitting behind a letter nobody opened.
Last reviewed: 26 July 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. General guidance, not advice on your circumstances.
Primary sources: SARS — VAT Refunds for vendors · SARS — Budget 2026 Frequently Asked Questions · SARS — Tax periods for VAT · Office of the Tax Ombud