How to invoice with VAT in South Africa

South Africa's standard VAT rate is 15%. The proposed increases to 15.5% and 16% announced in the 2025 Budget were withdrawn, and the rate stayed at 15% — so despite the headlines, nothing changed.

What did change is who has to register. From 1 April 2026, the compulsory VAT registration threshold rose from R1 million to R2.3 million in taxable supplies over any consecutive 12-month period, and the voluntary threshold rose from R50,000 to R120,000. These were the first upward adjustments to the thresholds in years, and they pulled a large number of small businesses back out of the compulsory VAT net.

If you are not registered for VAT, you must not charge it. An unregistered business adding 15% to an invoice is collecting tax it has no right to collect. Your invoice is simply an invoice — not a tax invoice — and it should not carry a VAT line or a VAT number.

This page is general information, not tax advice. VAT has real edge cases (zero-rated and exempt supplies, imports, the tax fraction on inclusive pricing), so confirm your situation with your accountant or with SARS.

SARS recognises two kinds of tax invoice, and which one you issue depends on the value of the supply including VAT.

For supplies over R5,000 you must issue a full tax invoice, which identifies both you and your customer. For supplies over R50 but not more than R5,000 you may issue an abridged tax invoice, which is the same document minus the recipient's details. Below R50, a tax invoice isn't required at all, though you still need some form of document for your records.

The practical advice: if you're invoicing a business, just issue a full tax invoice every time. The abridged form exists mainly for point-of-sale receipts. A full tax invoice is always acceptable, it costs you nothing extra to produce, and it means your client can claim their input VAT without coming back to you for a corrected document.

Section 20(4) of the VAT Act sets out the required contents of a full tax invoice. SARS applies this strictly: invoices are checked against the list, and if one criterion is missing the invoice can be disallowed for input VAT purposes. That's your client's problem in the first instance — and then it's yours, because they'll be back asking you to reissue it.

Work through this list before you send anything. The two fields people most often get wrong are the wording at the top (it must actually say "Tax Invoice", "VAT Invoice" or "Invoice") and the recipient's VAT number, which is required when your customer is a registered vendor.

On presenting the amounts, you have a choice. You can show the value excluding VAT, the VAT charged, and the total consideration as three separate lines — the clearest option, and what most invoicing software does by default. Alternatively you may show the VAT-inclusive total together with a statement that it includes VAT and the rate charged.

An abridged tax invoice drops the recipient's details but keeps everything that identifies you and the tax. It's the shorter form permitted for supplies between R50 and R5,000 including VAT.

Because it omits the customer's name, address and VAT number, it's best suited to over-the-counter sales where you're not billing a named business account. If a customer later asks for a full tax invoice so they can claim their input VAT, you're required to issue one on request.

VAT arithmetic goes wrong in two predictable places: rounding, and working backwards from an inclusive price.

If you price excluding VAT, the VAT is simply the net amount times 0.15. R2,500 excluding VAT carries R375 of VAT, for a total of R2,875. If you price including VAT, you can't just take 15% of the total — you need the tax fraction, which at a 15% rate is 15/115. On a R2,875 inclusive price, the VAT is R2,875 x 15/115 = R375, leaving R2,500 net. Taking 15% of R2,875 would give you R431.25, which is wrong.

Rounding is the other trap. Calculate VAT per line and round consistently, rather than computing a total and reverse-engineering the parts. Small discrepancies between your line items and your total are exactly the kind of thing that draws attention on an audit. Good invoicing software handles this by storing every amount in cents as a whole number and never using floating-point arithmetic for money — which is how Platybooks does it, so your totals always reconcile to the cent.

Platybooks handles the mechanics of a compliant tax invoice so you're not maintaining a spreadsheet template. You set your default tax rate once in Settings, and every new line item picks it up — so a South African workspace set to 15% stops you forgetting VAT on a line.

Invoice numbers come from the database under a row lock, which means they're sequential and gapless per workspace. That matters for the "serial number" requirement: numbering generated in a spreadsheet or a browser tab can skip or repeat, and gaps in an invoice sequence are a question you don't want to answer twice. Your VAT number and address live in your organisation settings and appear on every PDF, and each document shows the net, the VAT, and the total as separate lines.

From there you can email the invoice with the PDF attached, add a Paystack payment link so the client can settle it by card in rand, and let automatic reminders chase anything that goes overdue. You can build a VAT invoice right now in the free generator — no account needed — or start a free workspace to save and send them.