Regulatory updates - South Africa

On 8 September 2023, the South African Revenue Service (SARS) published the Discussion Paper intended to simplify and modernize the current VAT system.

To achieve this, SARS unveiled public consultation on real-time reporting of VAT invoice data to ease the VAT return process.

How would the model look?

The VAT data acquired from the issued/received tax invoices or electronic tax invoices and made/received payments processed in the accounting data system will be digitally transmitted to SARS, i.e., manual portals, cash receipt devices.

The data is to be transmitted on a near-real-time (RTR) basis. The transmission must occur within a 24-hour period by the subsequent reduction of this period to 6-hour and 1-hour data reports.

The RTR transaction report will be used to pre-fill VAT returns for taxpayers. Taxpayers will still be required to report VAT data for VAT return purposes before the due date.

The implementation of digital VAT data transmission is planned over the period of 5 years.

What has SARS learnt from the international experience?

SARS researched and analyzed electronic invoicing introduction and implementation in 11 countries and the recent developments under the VAT in the Digital Age (ViDA) proposal within the EU.

After reviewing the various experiences, SARS is aiming to meet certain requirements:

• Announcing 5-year requirement for recordkeeping.
• Introducing new platforms capable of processing and storing large amounts of data.
• Building an efficient e-invoice validation system and process.
• Imposing penalties for non-compliance.
• Building a secure system capable of withstanding possible cyber-attacks.
• Implementing e-invoicing on a gradual basis starting with large taxpayers.