e-Invoicing in South Africa: Timeline, Guidelines, Process, and Steps for Implementation

South Africa is preparing for the official rollout of e-invoicing, a key step towards improving VAT reporting and reducing tax fraud. Led by SARS, the system will make it mandatory for VAT-registered businesses to issue e-invoices in a structured format and get them validated in real time. 

As of April 2025, the South African e-invoicing framework is still in its pilot stage and not mandatory, with businesses voluntarily opting for the e-invoicing process to ensure ease of business. Once mandatory, it will apply to all businesses in a phased manner. This guide covers what e-invoicing is, the implementation timeline, who it applies to, how the system works, and what steps businesses need to follow for smooth compliance with South Africa’s e-invoice guidelines.

What is e-Invoicing in South Africa?

South Africa is moving towards a digital approach to VAT reporting, led by the South African Revenue Service (SARS). It requires VAT-registered businesses to generate invoices in a structured electronic format, validate them through a real-time clearance system, and submit them to SARS before sharing with buyers. The system follows a centralized model, aligned with international standards such as PEPPOL, and aims to reduce tax fraud, improve efficiency, and ensure accurate reporting. It is currently in the pilot phase and will be rolled out in stages.

e-Invoice Implementation Timeline

E-invoicing is not compulsory; however, as of April 2025, authorities have started laying the groundwork for future implementation. SARS is actively progressing towards implementation through a second public consultation, which is expected later this year. The system is still in its planning phase, with no official mandate issued yet for any specific taxpayer group.

SARS plans to adopt a Peppol-based 5-corner model for real-time VAT transaction reporting, similar to frameworks used in France and Belgium. This follows the initial consultation held in September 2023. The goal is to enable continuous transaction controls and offer pre-filled VAT returns using e-reporting data.

e-Invoicing Process in South Africa

​South Africa is preparing to implement a Peppol-based 5-corner e-invoicing model to enhance VAT reporting and reduce tax fraud. This system will involve multiple stakeholders to ensure real-time invoice validation and compliance.​

1. Invoice Creation: A supplier creates an electronic invoice in a structured format. Common formats include XML or UBL. This is done using their ERP or accounting software.​
2. Transmission to Access Point: The invoice is then sent to the supplier’s certified Peppol Access Point. The Access Point checks the invoice. It verifies that the invoice follows all technical and business rules.
3. Submission to SARS: The validated invoice is forwarded to the South African Revenue Service (SARS) for real-time clearance and assignment of a unique identifier.​
4. Delivery to Buyer: Once cleared, the invoice is transmitted to the buyer's AP and then to the buyer's system for processing and payment.
5. Archiving: Both parties are required to store the electronic invoice securely for a specified period, ensuring compliance with local regulations.

e-Invoicing Compliance Guidelines

Here are the current compliance guidelines businesses should follow for e-Invoicing in South Africa:

• Structured Format Required: Invoices must be issued in a structured digital format (like XML or UBL) to enable automated processing.
• Use of Peppol Network: Only registered participants can exchange e-invoices via certified Peppol Access Points.
• SARS Validation: SARS will need real-time validation before sending the e-invoices to the buyer.
• Data Accuracy: Invoice data must match VAT return details—any discrepancies may lead to penalties.
• Secure Storage: Both the supplier and the buyer must store validated invoices digitally for the legally required period.
• Future Mandate: While not yet mandatory, businesses are encouraged to prepare for enforcement likely after the second half of 2025.

Who Needs to Comply with e-Invoicing in South Africa?

E-invoicing is still optional as of 2025. However, VAT-registered businesses are required to submit digital invoices when filing VAT returns via SARS eFiling. While not yet mandatory, broader adoption is anticipated following the upcoming regulatory consultation. 

Benefits of e-Invoicing in South Africa

E-invoicing can offer numerous advantages for businesses in South Africa:

• Cuts down on paperwork and manual processing.
• Reduces invoice fraud and tax evasion.
• Speeds up VAT return preparation and submission.
• Ensures greater accuracy and audit readiness.
• Lowers administrative costs and improves cash flow.

How can ClearTax help a business with e-Invoicing in South Africa?

ClearTax simplifies e-invoicing for businesses in South Africa by offering an all-in-one, compliant solution:

• Seamless integration: Connects smoothly with your ERP or billing system to generate e-invoices in SARS-compliant format.
• Regulatory compliance: Validates invoices against SARS requirements before submission, reducing the risk of rejections.
• Data security: Safely stores and organises e-invoices, making them easily accessible for audits or VAT reporting.
• Automated reminders: Help businesses stay compliant by sending alerts for upcoming deadlines or errors.
• Digital signature support: Assists in managing digital signatures, ensuring all invoices meet SARS clearance standards.

Conclusion

South Africa is getting ready to roll out mandatory electronic invoicing, using a structured format such as XML or JSON. The new system is likely to follow a Peppol-based 5-corner model. Although these requirements are not yet in force, companies are being urged to start preparing now.

ClearTax is helping businesses gear up for this change. Our solutions make it easier to validate invoices, store them securely, work with existing software, and apply digital signatures, making sure businesses are ready when the new rules come into play.