On August 17, 2026, the South African Revenue Service (SARS) invited public input on a new Digital VAT Model to modernize VAT administration. The proposed model introduces e-invoicing and e-reporting through an interoperable framework, part of the country’s VAT modernization initiative under the Modernisation 3.0 strategy.
Following feedback on a 2023 Discussion Paper on Modernisation, SARS published a VAT Modernisation Consultation Paper that reflects stakeholder comments and sets out proposals for the initiative. Sovos recommends reviewing the consultation paper directly, since it is the primary source for the requirements below and for any future regulations that follow.
A decentralized model
The consultation paper proposes a five-corner decentralized Continuous Transaction Controls (CTC) model. Under this model, accredited service providers validate, clear, and exchange e-invoices. Both the seller and the buyer report transaction data through their respective accredited service providers. SARS then receives the cleared transactional data for risk analysis and pre-filled VAT returns. In the future, SARS plans to use this data for auto-assessment of VAT liability.
E-invoice format
The consultation paper defines an e-invoice as a structured, machine-readable tax invoice that is issued, transmitted, and received in a structured electronic format that allows for automatic processing. This definition excludes PDFs, scanned images, and emailed documents.
E-invoices must comply with a prescribed standard, such as:
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EN16931 CIUS
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UN/CEFACT Cross-Industry Invoice
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Peppol PINT BIS
SARS will define additional technical requirements in later regulations.
Implementation timeline
SARS plans to implement the Digital VAT Model in five phases, in consultation with stakeholders. The timelines below are guidelines only. SARS may revise them based on stakeholder feedback and on progress with planning and implementation.
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Phase 1, Preparation: Covers stakeholder consultation, readiness assessment, and publication of draft VAT regulations. This phase is planned to start in 2026/2027 and run for 12 months.
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Phase 2, Solution development: Finalizes technical standards and service provider accreditation, and promulgates VAT regulations. This phase is planned to start in 2027/2028 and run for 12 months.
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Phase 3, Validation and quality assurance testing: Covers controlled testing with voluntary participants. This phase is planned to start in 2028/2029 and run for 6 months.
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Phase 4, Pilot: Covers testing with voluntary participants from priority segments. This phase is planned to start in 2029/2030 and run for 6 months.
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Phase 5, Phased implementation: Starts in 2030 with large B2B taxpayers, then extends to B2G, then to micro, small, and medium enterprises (MSMEs), and finally to B2C transactions. This phase is planned to run for 36 months.
