Inhalt
South Africa is gradually aligning itself with global trends in digital tax administration. While electronic invoicing (e-invoicing) is not yet mandatory, significant progress has been made through the VAT Modernisation Project spearheaded by the South African Revenue Service (SARS).
What is currently required?
As it stands, South Africa does not mandate e-invoicing. Although not compulsory, e-invoicing is already regulated. At present, companies that want to use electronic data interchange (EDI) for invoicing need prior authorization from either SARS or the National Treasury.
Such invoices must contain the same mandatory details as paper invoices, including supplier and buyer information, a unique invoice number, the issue date, and a clear description of the goods or services. They must also be archived for at least five years, or seven years under the Companies Act.
Additionally, since 1st April 2025, invoice data has also been required on electronic customs declarations.
Timeline of the VAT modernisation project
1991 – Introduction of VAT
South Africa adopted a Value-Added Tax system through the VAT Act, 1991, requiring registered vendors to submit periodic VAT returns and issue valid tax invoices.
2023 – A shift towards Digital Reporting
In September 2023, SARS released a discussion paper proposing a shift to real-time VAT reporting. Key suggestions include:
- Submission of invoice and payment data within 24 hours (eventually reduced to 6, then 1 hour)
- Use of submitted data to pre-populate VAT returns
- A phased rollout over five years, beginning with large taxpayers
The 2023 Budget Review (Chapter 4, page 54) emphasized SARS’s intent to modernise and simplify the VAT framework, promising extensive consultation with stakeholders.
2025 - The draft TALAB
On 16 August 2025, SARS and National Treasury published the Draft Tax Administration Laws Amendment Bill (TALAB) for public comment (open until 12 September 2025). The bill lays the groundwork for mandatory e-invoicing and digital VAT reporting, supporting the modernization agenda.
Key Highlights from the Draft TALAB:
- Definition of an E-Invoice
The draft legislation describes an e-invoice as a tax invoice that is created, sent, and received in a structured electronic format that can be processed automatically. Further technical details will be set out by the Ministry of Finance.
- Definition of E-Reporting
According to the draft, e-reporting means transmitting tax data from e-invoices and related documents (debit and credit notes) electronically to SARS. In some cases, this information can also be shared with other relevant parties, like suppliers or customers.
- Interoperability Framework
The framework being discussed would set up a decentralised system of approved service providers. These would act as intermediaries to securely transfer structured electronic documents and allow smooth exchange between taxpayers.
The potential Five-Corner Model
Although not officially confirmed, there are strong indications that SARS is considering implementing mandatory e-invoicing by 2028. Based on international benchmarks, South Africa may adopt a Five-Corner Model similar to those being rolled out in countries like France, Singapore, and Belgium.
This model, often associated with the Peppol framework, enables seamless exchange of invoice data between suppliers, buyers, and tax authorities via certified access points. It ensures:
- Real-time data validation
- Greater invoice traceability
- Lower fraud risks
- Improved VAT compliance
Recordkeeping and archiving requirements
Businesses must retain electronic invoices for at least five years, in line with SARS requirements. However, under the Companies Act, the retention period extends to seven years. Proper archiving practices are crucial for compliance and audit readiness.
Who needs to comply?
For now, all VAT‑registered businesses must file via eFiling and submit supporting documents on request. Businesses that adopt e‑invoicing voluntarily must follow SARS’s format and retention rules. Under the modernisation plan, large taxpayers will be the first to implement near‑real‑time reporting, with smaller entities phased in later. Any company that fails to prepare risks a disruptive transition when digital reporting becomes compulsory.
SAP E-invoicing in South Africa: PINT and the voluntary phase
In South Africa, e-invoicing is still at a voluntary stage, even though SARS has announced plans to introduce a mandatory system by 2028 as part of its VAT Modernisation Programme. For now, companies that wish to issue electronic invoices can do so, but they must follow the same rules that apply to paper invoices. This means that the invoice has to contain all the legally required VAT information, must remain secure and tamper-proof, and must be archived for at least five years. Importantly, the buyer also needs to give written consent to receive an invoice in electronic form – without this approval, the e-invoice is not considered valid under current South African law.
For businesses that are already using SAP, the Document and Reporting Compliance (DRC) solution offers a way to get ahead of these changes. SAP DRC makes it possible to generate and manage invoices in structured electronic formats, ensuring that data can be transmitted securely, validated, and stored in line with compliance rules. While South Africa has not yet mandated a specific technical model, the country is looking closely at the Peppol 5-corner model, which is widely used internationally. In this model, invoices are exchanged through certified access points using standardized formats such as PINT (Peppol International Invoice). PINT is designed to simplify cross-border invoicing by creating a common standard that can be used in multiple jurisdictions.
Although the South African framework is not finalised, adopting SAP’s DRC with support for PINT today gives businesses a strong advantage. It allows them to align with global best practices, prepare their internal systems and staff for structured e-invoicing, and avoid a last-minute rush once SARS makes the system mandatory. Early adopters also benefit from smoother processes, faster reconciliation, and improved visibility over transactions, even before the mandate comes into force.
How PIKON can help you
Transitioning to digital VAT reporting can be complex. PIKON’s Team for Legal Requirements monitors regulatory changes worldwide and combines tax expertise with SAP know‑how. Our consultants can:
- Analyse SARS’s data model and design SAP mappings.
- Implement SAP DRC or custom extraction solutions.
- Guide you from paper invoices to compliant electronic invoices.
- Manage projects and train your team.
- Keep your system up to date as regulations evolve.
By preparing today, you can reduce disruption tomorrow. South Africa may not require SAF‑T yet, but digital reporting is on the horizon. Proactive planning and expert support will ensure your SAP environment is ready when the future arrives.
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