VAT Invoice Requirements

VAT Invoice Requirements

• 07 December 2023
• Accounting
• The Tax Faculty Tax Specialist

This FAQ article is based on tax law for the year ending 29 February 2024.

1. The Problem / Facts

With regards to the requirements for a valid tax invoice, does legislation specify whether it should include the physical address or the postal address? What address should be used in the case of a company with multiple branches?

2. Applicable Law 

Section 20(4) of the Value-Added Tax Act, No 89 of 1991

3. Application of the Law to the Facts

Section 20 (4) of the Value-Added Tax Act, No 89 of 1991 (VAT Act) prescribes that a tax invoice must contain certain details about the taxable supply as well as the parties to the transaction before it can be used by a trader to claim an input tax deduction in respect of the purchases made by the trader for his enterprise123. The following information must be included in a tax invoice.

• The words ‘tax invoice’, ‘VAT invoice’ or ‘invoice’.

• The name, address and VAT registration number of the supplier.

• The name, address and VAT registration number of the recipient (if applicable).

• Serial number and date of issue.

BGR 21, clarified that the address of the recipient and the supplier that must be reflected on a tax invoice, credit or debit note is either the physical address from where the enterprise is being conducted; the postal address of the enterprise; or both the physical and the postal address of the enterprise.

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FAQs

1. What are the VAT invoice requirements in South Africa?

In South Africa, a valid VAT invoice must include:

• The words “Tax Invoice”,

• Supplier’s name, address, and VAT number,

• The date of issue,

• A unique invoice number,

• Purchaser’s name, address, and VAT number (if over R5,000),

• Description of the goods or services,

• VAT rate, amount, and total price.

2. When is a VAT invoice required in South Africa?

A VAT invoice is required whenever a VAT-registered vendor makes a taxable supply exceeding R50. For supplies over R5,000, a full tax invoice with buyer details is mandatory.

3. What is the difference between a full and an abridged VAT invoice?

An abridged invoice can be issued for supplies between R50 and R5,000 and doesn’t require the customer’s details. A full tax invoice is required for supplies above R5,000 and must include both the supplier’s and recipient’s full names, addresses, and VAT numbers.

4. Can I claim VAT without a valid tax invoice?

No. You cannot claim input VAT unless you have a valid tax invoice that complies with section 20 of the VAT Act. SARS may disallow the claim during audits if the documentation is incomplete or incorrect.

5. What happens if a VAT invoice is missing required information?

If a VAT invoice is missing key information—such as the supplier’s VAT number or the words “Tax Invoice”—SARS may disqualify it, and input VAT may not be claimable. Always ensure invoices meet legal requirements.

6. Do electronic VAT invoices count as valid in South Africa?

Yes. Electronic VAT invoices are acceptable, provided they contain all required information, are legible, and can be retrieved and presented to SARS if requested.

7. Is a quote or pro forma invoice acceptable for VAT input claims?

No. A quote or pro forma invoice is not a valid tax invoice and cannot be used to claim VAT. Only a compliant tax invoice issued at the time of supply qualifies.

8. How long must I keep VAT invoices in South Africa?

VAT invoices and related records must be kept for five years from the end of the tax period in which the transaction occurred. This is required for SARS audit and verification purposes.

9. Can a VAT invoice be issued in a foreign currency?

Yes, but the VAT amount must be shown in South African rand (ZAR). The VAT Act requires that the tax amount be clearly stated in ZAR to be valid for VAT input claims.

10. Who is responsible for issuing a VAT invoice?

The supplier of goods or services must issue the VAT invoice if they are a VAT-registered vendor. The invoice must be provided within 21 days of making the taxable supply.

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