VAT Invoices Explained (South Africa)
A complete guide to VAT invoices in South Africa. What they are, what they must include, and how to create SARS-compliant tax invoices.
What Is a VAT Invoice?
A VAT invoice (also called a tax invoice) is a document issued by a VAT-registered business that records a taxable transaction. It includes specific information required by SARS and allows the recipient to claim input VAT on their purchases.
In South Africa, Value Added Tax (VAT) is charged at 15% on most goods and services. If you're a VAT-registered vendor, you must issue tax invoices for all taxable supplies and keep records for at least 5 years.
Getting your tax invoices right is crucial. Incorrect invoices can lead to SARS audits, penalties, and your clients being unable to claim their input VAT.
What Must a Tax Invoice Include?
Types of VAT in South Africa
Standard Rate (15%)
Most goods and services in South Africa
Zero Rate (0%)
Taxable but at 0% — input VAT can still be claimed
Exempt
Not subject to VAT — no input VAT can be claimed
Full vs Abridged Tax Invoices
Full Tax Invoice
Required for supplies over R5,000. Must include all fields listed above, including buyer's name, address, and VAT number.
Abridged Tax Invoice
Allowed for supplies of R5,000 or less. Can omit buyer's details but must still include all seller information and VAT calculations.
VAT Calculation Example
Adding VAT (VAT-exclusive price)
Formula: VAT = Price × 0.15
Extracting VAT (VAT-inclusive price)
Formula: VAT = Price × 15/115
Frequently Asked Questions
When must I register for VAT?
You must register when your taxable turnover exceeds R1 million in any 12-month period. Voluntary registration is available from R50,000 turnover.
What's the difference between a tax invoice and a regular invoice?
A tax invoice is issued by a VAT-registered vendor and includes specific information required by SARS. It allows the recipient to claim input VAT. A regular invoice doesn't include VAT details.
Can I issue a tax invoice before I'm VAT registered?
No. You can only issue tax invoices once you have a valid VAT registration number from SARS. Issuing tax invoices without registration is illegal.
How long must I keep tax invoices?
SARS requires you to keep all tax invoices (issued and received) for 5 years. Electronic storage is acceptable.
What if I make a mistake on a tax invoice?
Issue a credit note to correct the error, then issue a new tax invoice if needed. Never alter an issued invoice — always use credit notes.
Do I need to show VAT separately on the invoice?
Yes. The VAT amount must be shown as a separate line item. You can show prices as VAT-inclusive or VAT-exclusive, but the VAT amount must be clear.
Create SARS-Compliant VAT Invoices
Illumi automatically includes all required fields on your tax invoices. Just enter your VAT number once, and every invoice you create will be fully compliant.