Invoicing requirements in South Africa (SA) vary slightly, depending on whether you are sending an invoice or a tax invoice. Apart from all other information in an invoice, a tax invoice also includes the tax paid.
The laws and regulations that guard invoices differ in every region, and for that reason, it is simply important for you to adapt to these laws and regulations as a safety measure before you conduct any transaction.
Invoicing in South Africa requires the P&G global invoicing guideline standards to be followed. Read on to learn more about invoice requirements in SA.
- Customer Information
- Supplier Information
- Credit Notes
- Foreign Currency Invoice
- Tax Invoice
- Creating a South African Invoice
The full name of the customer as it appears in their business or company registration certificate. In the case of an individual, provide their name as it appears in their government-issued ID.
You have to include the customer’s address where you delivered the items or services. In the case of a business, this should be their official business address in SA.
Value Added Tax (VAT) Number
Include your full name, as it appears in your government-issued ID or your business name as it appears in your registration certificate. The name you provide has to match the one you gave your client to use in the Purchase Order (PO).
You need to include your official business address, as it appears in your tax documents. Moreover, this address should be similar to what is on the PO. SARS agents can view discrepancies as an attempt to commit tax fraud.
VAT Registration Number
As a supplier, you need to have a VAT Number to send an invoice. You use the VAT number to charge the customer VAT taxes, and then submit them to the SA Revenue Service (SARS).
Your VAT registration number is required to be made visible, in any case, the recipient is a vendor, their VAT registration number is to be included as well.
Your vendor number that SARS issued you in SA must also be included in the invoice.
Invoice Serial Number and Date
The invoice must have a unique serial number and the date that you issued the invoice.
Proof of Performance
When sending a credit note instead of an invoice, you should indicate the reason for sending it. The reasons can include quantity or price adjustment. Where applicable, the credit note should have the invoice number of the corresponding invoice.
Foreign Currency Invoice
You can send a foreign currency invoice, but only if the invoice is zero-rated. For standard rated tax invoices, you should make a conversion to SA Rand, and include the converted figures in the Tax Invoice. Foreign Currency Invoice stamp is required for invoicing in South Africa.
Generally, if the value of goods supplied annually exceeds 5,000 ZAR, then you need to submit a tax invoice. Your SA tax invoice should also include the following details:
- The words “Tax Invoice,” in bold, preferably in the header section.
- Your identity details and your business number registered with SARS.
- Foreign Currency Invoice (FCI) stamp, if payment is in foreign currency.
- Tax invoice date, item/service description, item quantity, and price.
- The total value of the supply and the amount of tax charged.
- The 15% tax amount must be shown
- Name and address of the recipient
- Full description and volume of each the goods or services
- Include a serialized invoice number
- Invoices are required to be structured to reflect the total sum of goods or services, displayed as a subtotal, tax amount, and grand total.
Creating a South African Invoice
There are two types of tax invoices to consider, the Fill Tax Invoice Requirements and the Abridged Tax Invoice Requirements. The former applies to taxable supplies and services that are either equal to or greater than R5000, While the latter applies when the value of taxable supplies and service are less than R5000 but more than R50.
Tax Invoices are to be issued within 21 days of supply with or without solicitation.
Note that there’s a slight difference between an invoice and a Tax invoice. Basically, an invoice is a documented proof of a transaction conducted at a given period and specified amount to be paid, charges, payments, refunds, and dates are documented to reflect the given transaction.
Tax invoices albeit are legal documentation submitted to a customer which includes tax, required to reflect the VAT Act of 1991 — ‘Tax Invoice’, merchant identity, business number information, invoice date, item descriptions, quantity, price, and a foreign currency stamp be made visible in documentation.
Value Added Tax (VAT) is an indirect tax placed on goods and service consumption in the economy. It is specifically applied to products that go up in value, usually charged at production and distribution process stages of the product, essentially allowing the consumer to pay only for the cost of the product minus other material costs already taxed before it reaches the consumer.
By South African law, a 15% inclusion on all required prices is mandatory for business owners. For any VAT incurred while conducting business, you are entitled to a claim back — ideally, most VAT returns require completion every two months.
Manual Invoicing is a long and tedious process, even when you have an in-house invoice template. It is important to consider the significance of invoices to our everyday financial dealings, they are the sole guarantees of transactions, sales, and recording keeping should in case the need for proof rises and prove to be a better management system.
For most e-commerce businesses the use of the electronic invoice is a way better option than the traditional system of invoicing, it is most convenient as it saves a lot of management stresses as your business is already conducted online.