South Africa Prepares Legal Framework for Real-Time VAT Reporting and E-Invoicing
On 16 August 2025, South Africa’s National Treasury and the South African Revenue Service (SARS) released the Draft Tax Administration Laws Amendment Bill (TALAB) for public consultation, open until 12 September 2025. The bill provides the legal foundation for SARS’s VAT Modernisation Project, a multi-year initiative to digitize VAT reporting, enhance compliance, and improve efficiency in tax administration.
Core Objectives
The VAT Modernisation Project aims to:
- Introduce real-time data transmission from vendors to SARS, changing how VAT is reported, monitored, and enforced.
- Reduce the VAT gap, currently estimated at R800 billion annually.
- Streamline administration for businesses and SARS through automation and integration.
Key Definitions Introduced
The draft sets out new terms that establish the basis for future obligations:
- E-Invoice – A tax invoice that must be issued, transmitted, and received in a structured electronic format, suitable for automatic processing. Additional technical requirements will be determined by the Minister.
- E-Reporting – The electronic submission of tax data extracted from e-invoices, e-debit notes, and e-credit notes to SARS, suppliers/service providers, and recipients, where applicable.
- Interoperability Framework – A network of approved service providers that enables decentralized exchange of e-documents (e-invoices, debit notes, credit notes) and ensures interoperability between suppliers and recipients.
What’s Next for Businesses
While the current draft mainly establishes definitions, it signals the direction of future reforms. Companies should anticipate:
- Regulations specifying the technical framework for e-invoicing and e-reporting.
- New compliance obligations for electronic document exchange.
- Clear implementation timelines once the framework is finalized.
- Requirements or options to connect with approved service providers under the interoperability model.
There’s more you should know about global e-invoicing changes – learn more about the new and upcoming regulations.
