South Africa Moves Towards Mandatory E-Invoicing by 2028

South Africa is preparing to mandate electronic invoicing by 2028 as part of efforts to modernize tax compliance and curb VAT fraud, which costs the country up to ZAR 50 billion (approx.€2.5 billion) annually. The South African Revenue Service (SARS) is considering a Peppol-based 5-corner model to enable real-time transaction reporting and pre-filled VAT returns. A second public consultation on the technical and legal framework is planned for late 2025, involving important stakeholders such as businesses and software providers.

South Africa is advancing towards mandatory electronic invoicing (e-invoicing) as part of its broader initiative to modernize tax compliance and reduce VAT fraud, which is estimated to cost the country between ZAR 22 billion and ZAR 50 billion annually.

The South African Revenue Service (SARS) is considering adopting a Peppol-based 5-corner model for e-invoicing. This model facilitates secure and standardized communication between businesses and tax authorities, enabling real-time transaction reporting and the potential for pre-filled VAT returns based on e-reporting data.

SARS plans to implement mandatory e-invoicing by 2028. To prepare for this transition, a second public consultation on the technical and legal requirements is expected in the second half of 2025. This consultation will involve stakeholders such as businesses, software providers, and accounting professionals to discuss data models, digital transmission methods, and the structure of modern VAT returns.

The move towards e-invoicing aligns South Africa with global trends, as countries like France, Belgium, and Italy have already adopted or are planning similar systems to enhance tax compliance and simplify VAT reporting.