South Africa Tax Invoice Requirements: SARS Compliance Guide

South African tax invoices must meet the requirements set out in Section 20 of the VAT Act 89 of 1991, administered by the South African Revenue Service (SARS). The legislation establishes a three-tier system based on the value of the supply: transactions under R50 do not require a tax invoice, supplies valued between R50 and R5,000 may be documented with an abridged tax invoice, and any supply exceeding R5,000 must be supported by a full tax invoice containing complete buyer and seller details.

This guide covers the South Africa tax invoice requirements across every area that matters for day-to-day compliance. It explains how the three-tier invoice system works in practice, details the mandatory fields for both full and abridged tax invoices, and walks through how to verify invoices when claiming input tax credits. Beyond the basics, it addresses credit and debit note requirements for adjustments, the rules governing electronic tax invoices and record retention, and the upcoming 2026 changes to the VAT registration threshold.

Whether you issue or receive tax invoices, compliance is your concern. A tax invoice that fails to meet SARS VAT invoice requirements cannot support an input VAT deduction claim, meaning the recipient bears the financial cost of the supplier's non-compliance. For readers who need a refresher on general invoice structure before working through the South African specifics, understanding the core components of an invoice provides useful foundational context.

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How South Africa's Three-Tier Tax Invoice System Works

The VAT Act 89 of 1991 does not treat every sale the same. It establishes three transaction value tiers, each with different documentation requirements. The tier is determined by the total consideration for the supply, inclusive of VAT, and dictates the minimum level of detail a VAT vendor must include on the tax invoice.

Understanding which tier applies matters because it directly affects what you should expect to see on invoices you receive -- and what you need to verify before claiming input tax credits.

Tier 1: Transactions of R50 or less. No formal tax invoice is required. A till slip or similar document showing the VAT amount is sufficient for the recipient, reducing the administrative burden on both parties.

Tier 2: Transactions from R50.01 to R5,000 (inclusive of VAT). The vendor may issue an abridged (abbreviated) tax invoice under Section 20(5). This document contains fewer mandatory fields than a full tax invoice. Most notably, the recipient's name, address, and VAT registration number are not required. This makes abridged invoices common in retail and smaller B2B transactions.

Tier 3: Transactions over R5,000 (inclusive of VAT). A full tax invoice must be issued under Section 20(4) with complete details for both the supplier and the recipient. There is no shortcut here -- every mandatory field must be present.

One important flexibility: a vendor may always choose to issue a full tax invoice even when an abridged one would suffice. If you receive a full tax invoice for a R2,000 purchase, that is perfectly valid. The South Africa tax invoice rules set a floor for each tier, not a ceiling.

Every tax invoice, regardless of tier, must contain the words "Tax Invoice", "VAT Invoice", or "Invoice" in the document heading. A document missing this heading fails at the most basic compliance check.

The following comparison table summarizes abridged vs full tax invoice South Africa requirements across all three tiers:

Requirement	Sub-R50 (Till Slip)	Abridged (R50.01 - R5,000)	Full (Over R5,000)
Document heading ("Tax Invoice" / "VAT Invoice" / "Invoice")	No	Yes	Yes
Supplier name	No	Yes	Yes
Supplier address	No	Yes	Yes
Supplier VAT registration number	No	Yes	Yes
Unique serial number	No	Yes	Yes
Date of issue	No	Yes	Yes
Description of goods or services	No	Yes	Yes
Value excluding VAT, VAT amount, and total including VAT	VAT amount shown	Yes	Yes
Quantity or volume of goods/services	No	No	Yes
Recipient name	No	No	Yes
Recipient address	No	No	Yes
Recipient VAT registration number	No	No	Yes

Note that the R50 and R5,000 thresholds are inclusive of VAT. A transaction totaling exactly R5,000 including VAT falls within the abridged tier, while one totaling R5,000.01 requires a full tax invoice.

The 21-day issuance rule adds a time constraint. Section 20(1) of the VAT Act requires the vendor to issue the tax invoice within 21 days of the date of supply. If you have not received an invoice within that window, follow up -- delays can complicate your own compliance obligations and record-keeping.

For address formatting, BGR 21 (Binding General Ruling 21) provides guidance: a physical address (business premises), a postal address, or both are acceptable on the invoice. The vendor is not required to list every address type, but at least one must appear.

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Mandatory Fields on Full and Abridged Tax Invoices

Getting the mandatory fields right on every tax invoice is not optional. Sections 20(4) and 20(5) of the South African Value-Added Tax Act set out exactly what information must appear, and the requirements differ depending on the value of the supply. This section breaks down every required field for both full and abridged tax invoices so you can verify compliance whether you are issuing or receiving them.

Full Tax Invoice: Section 20(4) Requirements

A full tax invoice is required for any supply with a value exceeding R5,000 (inclusive of VAT). Under Section 20(4), the following fields are mandatory:

1. The words "Tax Invoice", "VAT Invoice", or "Invoice" -- one of these phrases must appear prominently on the document. Without this label, the document does not qualify as a tax invoice under the VAT Act.

2. Supplier's name, address, and VAT registration number -- the registered name of the vendor making the supply, a valid address (physical, postal, or both, as clarified by SARS Binding General Ruling 21), and the supplier's 10-digit VAT registration number.

3. Recipient's name, address, and VAT registration number -- if the recipient is a registered vendor, their full details must appear on the invoice. This includes the registered name, address, and VAT number. For supplies to non-vendors, this requirement does not apply.

4. Individual serialised number -- every tax invoice must carry a unique invoice number. This number must be sequential and not duplicated across invoices. It serves as the primary identifier for audit trail purposes and SARS record-keeping requirements.

5. Date of issue -- the date on which the tax invoice was created. This date determines the tax period in which the supply falls and directly affects when output and input tax must be accounted for.

6. Full description of the goods or services supplied -- the description must identify what was supplied with reasonable specificity. Generic entries such as "services rendered" or "miscellaneous goods" are insufficient. SARS expects enough detail for a third party to understand the nature of the transaction.

7. Quantity or volume of goods or services -- the invoice must state how much was supplied. For goods, this typically means units, kilograms, litres, or another measurable quantity. For services, it may refer to hours, days, or project milestones.

8. Value of the supply (excluding VAT), the VAT amount, and the total consideration -- these three figures must be stated separately. The value exclusive of VAT, the VAT charged at 15% (unchanged following the reversal of a proposed increase in April 2025), and the VAT-inclusive total must each be clearly identifiable on the invoice.

9. Second-hand goods notation -- if the supply involves second-hand goods, this fact must be stated on the invoice. This is one of the most commonly overlooked South Africa VAT invoice mandatory fields. The notation is required whenever applicable because it affects the input tax calculation method available to the purchaser.

Abridged Tax Invoice: Section 20(5) Requirements

An abridged (sometimes called abbreviated) tax invoice may be issued for supplies valued between R50.01 and R5,000 (inclusive of VAT). The South Africa abbreviated tax invoice requirements under Section 20(5) are a reduced subset of the full invoice fields:

1. The words "Tax Invoice", "VAT Invoice", or "Invoice" -- the same labelling requirement applies.

2. Supplier's name, address, and VAT registration number -- identical to the full invoice requirement.

3. Individual serialised number -- a unique, sequential invoice number is still required.

4. Date of issue -- the date the invoice was created.

5. Description of the goods or services -- a description is required, though the level of detail expected is proportional to the transaction. The description must still be specific enough to identify what was supplied.

6. The consideration for the supply, the VAT amount, and the total -- the VAT-exclusive amount, VAT charged, and total must be shown.

The key difference from a full tax invoice is what you can leave out. Recipient details (name, address, and VAT registration number) are not required on an abridged invoice. Quantity or volume of goods or services is also not mandatory. These omissions reduce the administrative burden on suppliers processing high volumes of lower-value transactions.

What to Look for When Verifying Received Invoices

A few fields deserve closer attention when reviewing invoices you receive, because errors in them account for a disproportionate share of SARS compliance failures:

• Serial number: Check that the number is unique. If you receive multiple invoices from the same supplier with duplicate serial numbers, flag it immediately -- duplicates are a compliance risk for both parties and a red flag for SARS auditors.
• Description: Verify the description identifies the goods or services with reasonable specificity. Generic entries like "services rendered" or "miscellaneous goods" are insufficient. A SARS auditor should be able to understand the transaction from the invoice alone without additional context.
• Address: Per Binding General Ruling 21 (BGR 21), the address may be physical, postal, or both. At least one must be present. If an invoice you receive has no address at all, request a corrected version before processing payment.

When any of these mandatory fields are missing from an invoice you receive, SARS can deny your input tax credit claim on that transaction.

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Input Tax Credit Claims and Invoice Verification

Tax invoice compliance matters most for the receiver, not the issuer. Under Section 16(2) of the Value-Added Tax Act, a registered VAT vendor can only claim an input tax deduction if they hold a valid tax invoice that satisfies every requirement set out in Section 20. No compliant invoice, no deduction. The rule is absolute, and SARS enforces it without exception.

This creates a direct financial exposure for any business that pays VAT on purchases but fails to verify the invoices it receives. If a supplier issues a non-compliant invoice -- missing the supplier's VAT registration number, omitting the recipient's name and address on a full tax invoice, or failing to show VAT separately -- the recipient has two options: request a corrected invoice from the supplier, or lose the input tax credit entirely. There is no middle ground. Even if the transaction was legitimate and VAT was demonstrably paid to the supplier, SARS can and does disallow input tax claims during audits when the supporting documentation falls short of Section 20 requirements.

The scale of this risk is not theoretical. According to the 2025 Tax Statistics bulletin published jointly by National Treasury and SARS, South Africa had 900,285 registered VAT vendors in 2024/25, but only 55.2% were active, with companies and close corporations contributing 93.8% of all domestic VAT payments. With hundreds of thousands of vendors issuing invoices across the economy, the probability of receiving a non-compliant document on any given day is significant -- particularly from smaller suppliers or newly registered vendors unfamiliar with the full requirements.

A practical verification workflow for AP teams and bookkeepers receiving invoices should follow this sequence:

1. Confirm the document heading. The invoice must contain the words "Tax Invoice," "VAT Invoice," or "Invoice." Documents labelled as quotes, proforma invoices, or statements do not qualify.
2. Check the supplier's VAT registration number. Verify it is present and follows the correct format (10 digits starting with 4). Where doubt exists, validate the number against SARS's VAT vendor search tool.
3. Determine the invoice tier. If the VAT-inclusive value exceeds R5,000, it must be a full tax invoice with the recipient's name, address, and VAT registration number included. Below R5,000, an abridged tax invoice is acceptable with fewer recipient details. Apply the correct checklist for each tier.
4. Verify all mandatory fields. Cross-reference the invoice against the required fields for its tier: supplier name and address, serial number, date of issue, description of goods or services, quantity, value excluding VAT, VAT rate, VAT amount, and total including VAT.
5. Confirm the 21-day issuance rule. The invoice must have been issued within 21 days of the date of supply. An invoice issued outside this window is technically non-compliant and puts the input tax claim at risk.

When any of these checks fail, the corrective action is straightforward but time-sensitive: contact the supplier immediately and request a replacement invoice that meets the statutory requirements. Document the request and track follow-up. Claiming input tax on a known-deficient invoice is not a workaround -- it is an audit liability.

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Credit and Debit Note Requirements

Credit and debit notes are adjustment documents issued after the original tax invoice has already been provided to the recipient. Understanding how credit notes differ from standard invoices is useful background, but in South Africa, these documents carry their own specific VAT compliance obligations that many businesses overlook.

A credit note reduces the amount owed by the recipient. It is issued when goods are returned, a pricing error is corrected, a retroactive discount is applied, or an overcharge needs to be reversed. A debit note increases the amount owed and is typically issued when the original invoice understated the consideration, additional services were rendered, or a previously applied discount is reversed.

Mandatory Information on Credit and Debit Notes

Every credit or debit note issued under South African VAT law must contain the following:

• The words "Credit Note" or "Debit Note" displayed prominently
• The supplier's name, address, and VAT registration number
• The recipient's name and address
• The date of issue
• A reference to the original tax invoice's serial number
• A description of the goods or services being adjusted and the reason for the adjustment
• The adjusted VAT amount and the new total consideration
• A brief explanation of the circumstances giving rise to the adjustment

Where the original transaction was supported by a full tax invoice (consideration exceeding R5,000), the credit or debit note must mirror all the details that appeared on that original invoice.

The Most Commonly Missed Requirement

BGR No. 15 and Interpretation Note 56 both specify that a credit or debit note must include a brief explanation of the circumstances that necessitated the adjustment. In practice, this is the requirement businesses fail on most often. Many credit notes arrive containing only the adjusted rand amount and a reference number, with no written explanation of why the adjustment was made. SARS can reject these documents during an audit, leaving the recipient unable to support their amended VAT position and the supplier exposed to output tax discrepancies.

The explanation does not need to be lengthy. A single sentence stating "Goods returned due to manufacturing defect per agreement dated 12 March 2026" or "Price reduction applied as per revised contract terms" is sufficient. What matters is that the document itself records the commercial reason for the adjustment, not just the financial effect.

How Credit and Debit Notes Affect VAT Returns

Credit and debit notes directly alter the VAT obligations of both parties. When a credit note is issued:

• The supplier must reduce their output tax in the VAT period the credit note is issued.
• The recipient must reduce their input tax claim in the VAT period the credit note is received.

For debit notes, the reverse applies. The supplier increases output tax, and the recipient gains an additional input tax entitlement, again aligned to the VAT period in which the debit note is issued or received respectively.

Failing to account for credit notes in the correct period is a common source of VAT assessment adjustments. AP teams should have a process for matching credit notes to the corresponding original invoices and ensuring both the output and input tax adjustments flow into the correct return period.

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Electronic Tax Invoices and Record-Keeping Rules

SARS accepts electronic tax invoices as legally equivalent to paper invoices, provided they comply with the Electronic Communications and Transactions Act (ECTA) of 2002. For businesses already using accounting software, ERP systems, or digital billing platforms, this means your electronic invoices carry full legal weight for VAT purposes, but only if they meet specific integrity and accessibility standards.

Requirements for Valid Electronic Tax Invoices

An electronic tax invoice must satisfy four conditions to be accepted by SARS:

1. Complete mandatory fields. The electronic invoice must contain every field required for its applicable tier, whether full or abridged. The format is digital, but the content obligations are identical to paper invoices.

2. Data integrity under ECTA Section 14. The information in the invoice must remain complete and unaltered from the moment it was first generated. Any system that stores or transmits electronic invoices must preserve the original data without modification. Audit trails, version controls, or tamper-evident storage mechanisms help demonstrate compliance with this requirement.

3. Legibility and retrievability. Electronic invoices must be readable and retrievable for SARS inspection at any time during the retention period. Storing invoices in proprietary formats that become inaccessible after a software subscription lapses does not meet this standard.

4. Electronic signatures and access credentials. Where electronic signatures or authentication credentials are used, these must be available to SARS on request. Businesses should maintain records of the signing certificates, access logs, and authentication methods associated with their electronic invoicing systems.

Record-Keeping Obligations

Vendors must retain copies of all tax invoices, both issued and received, for a minimum of five years from the date of the last entry in the accounting records. This applies equally to paper and electronic formats. Electronic records satisfy the retention requirement as long as they meet the ECTA integrity standards outlined above. For businesses operating internationally and needing to compare invoice retention periods across different jurisdictions, South Africa's five-year minimum sits in the mid-range globally.

When storing records electronically, ensure your systems can produce complete, unaltered copies on demand. SARS auditors may request access to electronic records with little advance notice, and the burden of proof for data integrity falls on the taxpayer.

Consumer Protection Act and Upcoming E-Invoicing Rules

Separate from the VAT Act, the Consumer Protection Act (CPA) imposes its own invoicing obligations. For any supply exceeding R1, an invoice must be issued that includes full supplier contact information. Non-compliance with the CPA carries penalties of up to R1 million or 10% of annual turnover, whichever is greater. Businesses should treat CPA invoice requirements as an additional layer on top of VAT invoice obligations rather than an alternative.

Beyond existing rules, South Africa is developing a mandatory e-invoicing framework under SARS oversight. This will introduce standardized electronic invoicing requirements beyond the current ECTA-based rules, likely including specific data formats, real-time or near-real-time invoice reporting to SARS, and integration with SARS digital platforms. Businesses should monitor South Africa's upcoming e-invoicing mandate and timeline to prepare for these changes.

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2026 VAT Registration Threshold Changes

South Africa's mandatory VAT registration threshold has stood at R1 million in annual taxable turnover since 2009. That figure is about to change for the first time in 17 years.

As part of Budget 2026, the National Treasury announced revised thresholds effective 1 April 2026:

• Mandatory registration rises from R1 million to R2.3 million in annual taxable turnover
• Voluntary registration rises from R50,000 to R120,000 in annual taxable turnover

These adjustments are designed to reduce the compliance burden on smaller businesses, but they carry significant downstream consequences for anyone who receives invoices from those vendors.

What Changes for Businesses Between R1 Million and R2.3 Million

Businesses whose annual turnover falls between R1 million and R2.3 million will no longer be compelled to register as VAT vendors. They face a choice: deregister and exit the VAT system, or remain voluntarily registered.

A business that deregisters stops charging VAT on its supplies and stops issuing tax invoices. For that business, the administrative load drops considerably. But for its customers, the effect is the opposite. Without a valid tax invoice from a registered vendor, those customers lose the ability to claim input tax credits on purchases from that supplier.

Voluntary Registration Floor Increase

The voluntary registration threshold moves from R50,000 to R120,000. Small businesses that previously registered voluntarily with turnover between R50,000 and R120,000 now fall below the new floor. However, existing voluntary registrations are not automatically cancelled. SARS will not force these businesses off the register, but they should review whether continued registration still serves their interests.

What AP Departments and Accountants Should Do Now

The April 2026 changes create a verification gap that finance teams need to close proactively. If any of your suppliers have annual turnover near the previous R1 million threshold, you should confirm whether they intend to remain VAT-registered after the new thresholds take effect.

Specifically:

• Request confirmation from suppliers in the R1 million to R2.3 million turnover range about their registration status post-April 2026
• Verify VAT numbers against SARS records for any supplier whose registration status is uncertain
• Flag affected purchase orders where input tax credit claims depend on the supplier's continued VAT registration
• Update vendor master data once suppliers confirm their status, removing VAT vendor flags from any that deregister

Failing to verify could result in claiming input tax credits on invoices from deregistered suppliers, which SARS will disallow on assessment.

The compliance checklist that follows pulls together all the requirements covered throughout this guide into a single actionable reference you can use for day-to-day invoice verification.

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South Africa Tax Invoice Compliance Checklist

Use this checklist as a quick-reference tool for day-to-day invoice compliance under the Value-Added Tax Act. It covers both sides of every transaction: what suppliers must include when issuing, and what AP teams must verify when receiving.

Issuer Checklist (Suppliers)

• Document heading present. Label the document "Tax Invoice," "VAT Invoice," or "Invoice" as required under Section 20.
• Correct tier identified. Determine which invoice tier applies based on the VAT-inclusive value of the supply:
  • Below R50: no tax invoice required.
  • R50 to R5,000: abridged tax invoice (Section 20(5)).
  • Above R5,000: full tax invoice (Section 20(4)).
• All mandatory fields included for the applicable tier. For full invoices, this means complete seller and buyer details, individual VAT registration numbers, a full description of goods or services, and the tax amount shown separately. For abridged invoices, buyer details are not required, but all seller fields and the total consideration including VAT must appear.
• Issued within 21 days of the date of supply. Late issuance can expose both parties to compliance risk during a SARS audit.
• Second-hand goods notation included where applicable. If the supply involves second-hand goods acquired from a non-vendor, the invoice must state this clearly.
• Credit and debit notes reference the original invoice. For any post-supply adjustments, issue the appropriate note with the original invoice number, the reason for the adjustment, and a brief explanation of the circumstances as required under BGR No. 15.

Recipient Checklist (AP/Buyers)

• Document heading verified. Confirm the invoice is labeled "Tax Invoice," "VAT Invoice," or "Invoice." Documents without this heading do not qualify as valid tax invoices.
• Supplier VAT registration number confirmed. Cross-check the number against the SARS VAT vendor search tool. An invalid or missing registration number will invalidate your input tax credit claim.
• All mandatory fields present for the tier. Walk through the required fields for the transaction value. Flag any missing information and request a corrected invoice before processing payment.
• Issuance date within 21 days of supply. Verify the invoice date falls within the statutory window.
• Electronic invoice integrity confirmed. For invoices received electronically, verify that the document meets ECTA requirements: data integrity is intact (the content has not been altered), the invoice is legible in its stored format, and it remains retrievable on demand.
• Invoice filed and retained for a minimum of 5 years. Both paper and electronic records must be accessible for the full retention period in case of a SARS audit.

Quick Reference: Three-Tier Summary

Transaction Value (VAT-inclusive)	Invoice Tier	Key Requirement
Below R50	No invoice required	Retain proof of purchase for internal records
R50 to R5,000	Abridged (Section 20(5))	Seller details, VAT number, description, total including VAT. No buyer details needed.
Above R5,000	Full (Section 20(4))	Complete buyer and seller details, both VAT numbers, itemized description, VAT shown separately.

After April 2026: Verify Supplier VAT Status

Once the new VAT registration threshold takes effect in April 2026, suppliers with annual turnover between R1 million and the revised threshold may deregister. If you regularly transact with suppliers near the previous R1 million threshold, confirm their VAT registration status before claiming input tax credits on their invoices. A claim against a deregistered supplier will be disallowed.

Consequences of Non-Compliance

SARS can disallow input tax credits during an audit if the supporting tax invoice is missing mandatory fields, was issued outside the 21-day window, or references an invalid VAT registration number. The financial exposure extends beyond lost credits: penalties under the Consumer Protection Act can reach R1 million or 10% of annual turnover, whichever is greater.

Preparing for E-Invoicing

South Africa's mandatory e-invoicing framework is under development. Businesses that already issue and store invoices digitally with ECTA-compliant integrity controls will be better positioned for this transition. Start evaluating your invoicing systems now to confirm they can support structured electronic formats and the digital record-keeping standards that the mandate will require.