South Africa Transitions to Mandatory E-Invoicing and Real-Time VAT Reporting
South Africa is moving toward continuous digital VAT compliance under the South African Revenue Service’s (SARS) VAT Modernization program. Following a February 3, 2026, update from SARS and the National Treasury, which builds on a 2023 discussion paper and the 2025 Draft Tax Administration Laws Amendment Bill (TALAB), the government has signaled a clear intent to mandate electronic invoicing and real-time VAT reporting.
While the mandate is not yet compulsory, this shift represents a move away from periodic, post-filing audits toward system-driven, continuous tax oversight.
The Proposed E-Invoicing Framework
South Africa is leaning toward a hybrid, interoperable system rather than locking into a single rigid model. Key elements of the expected framework include:
- A Peppol-Style 5-Corner Model: Invoice data will likely flow between buyers, sellers, authorized service providers, and SARS. However, it is important to note that South Africa has not yet formally appointed a Peppol Authority under the OpenPeppol framework.
- Structured Data & Continuous Transmission: The system will require digitally structured e-invoices that allow for automated processing and the near-real-time transmission of transactional data directly from business systems to SARS.
- Decentralized Exchange: The interoperability network will likely rely on accredited service providers to facilitate the compliant exchange of invoice data.
This modernization aligns South Africa with global best practices in Latin America, France, and Belgium, as well as broader trends across the African continent.
Anticipated Timeline and Next Steps for Businesses
Timelines remain indicative pending official regulations, but a phased rollout is expected to begin in 2026–2027, with full operational implementation anticipated in 2028.
This reform will fundamentally change how transactional data is managed. Because continuous compliance requires strict data accuracy at the exact moment an invoice is created, early engagement is critical. Businesses, auditors, and ERP providers are encouraged to use this advance notice to prepare their systems, internal processes, and staff training for the upcoming transition.
There’s more you should know about global e-invoicing changes – learn more about the new and upcoming regulations.
