Help/VAT Invoices in South Africa

How VAT Invoices Work in South Africa

A complete guide to creating SARS-compliant tax invoices. Learn what's required, avoid common mistakes, and stay on the right side of South African tax law.

Important: This guide is for informational purposes. Consult a registered tax practitioner for advice specific to your situation.

What is a VAT Invoice (Tax Invoice)?

A VAT invoice, officially called a "tax invoice" in South Africa, is a document that a VAT-registered supplier must issue when making a taxable supply of goods or services. It serves as proof of the transaction and allows the recipient to claim input VAT.

The current VAT rate in South Africa is 15%, which has been in effect since 1 April 2018.

What Must Be on a Tax Invoice?

SARS requires the following information on every tax invoice:

The words 'Tax Invoice'

Must be prominently displayed on the document

Supplier's name, address, and VAT number

Your registered business details

Recipient's name and address

Your customer's details

Unique invoice number

Sequential numbering is recommended

Date of issue

When the invoice was created

Description of goods/services

Clear description of what was supplied

Quantity and unit price

For each line item

VAT amount

Shown separately from the total

Total amount including VAT

The final amount payable

VAT Rates in South Africa

15%Standard rate for most goods and services

Examples: Consulting, products, most services

0%Zero-rated supplies

Examples: Exports, basic food items, fuel levy goods

ExemptVAT-exempt supplies

Examples: Financial services, residential rent, public transport

How to Calculate VAT

Adding VAT (VAT Exclusive → Inclusive)

Amount × 1.15 = VAT-inclusive amount

Example: R1,000 × 1.15 = R1,150

Extracting VAT (VAT Inclusive → VAT Amount)

Amount × 15 ÷ 115 = VAT amount

Example: R1,150 × 15 ÷ 115 = R150

Common VAT Invoice Mistakes

Missing the words 'Tax Invoice' on the document

Not showing VAT as a separate line item

Using an incorrect or expired VAT number

Issuing invoices before registering for VAT

Not keeping copies of invoices for 5 years

Incorrect VAT calculations (should be 15% of the VAT-exclusive amount)

Frequently Asked Questions

When do I need to register for VAT in South Africa?

You must register for VAT if your taxable turnover exceeds R1 million in any 12-month period. You may voluntarily register if your turnover exceeds R50,000.

Can I claim VAT on invoices that don't say 'Tax Invoice'?

No. SARS requires the words 'Tax Invoice' to appear on the document for you to claim input VAT. Regular invoices or receipts are not sufficient.

How long must I keep VAT invoices?

SARS requires you to keep all tax invoices for at least 5 years from the date of the last entry in the books.

What's the difference between a tax invoice and a regular invoice?

A tax invoice includes VAT details and meets SARS requirements, allowing the recipient to claim input VAT. A regular invoice is just a request for payment without VAT implications.

Create SARS-Compliant Invoices

Illumi automatically includes all required fields for South African tax invoices. VAT is calculated correctly every time.