New South African invoicing requirements for digital service providers

The South African Revenue Service (SARS) has issued a new Regulation which sets out the new content requirements for tax invoices issued by digital service providers which are registered for VAT in South Africa. These requirements are more detailed and comprehensive than the previous simplified requirements set out in a previous Binding General Ruling.

The key changes and new requirements include:

  • It is no longer sufficient to simply state the customer’s email address and going forward, the invoice must specifically include either the business, residential or postal address of the customer.
  • The description of the electronic services supplied must now be “full and proper” – suggested an additional more granular level of detail
  • The value of the supply is now specifically required in addition to the VAT amount. Previously it was acceptable to just show the amount of tax charged shown.

This new Regulation came into force with effect from December 10, 2021. Meeting the local tax invoicing requirements in South Africa is even more crucial for global digital service providers than in many other countries, as the country also taxes B2B supplies of digital services by foreign businesses. As a result, tax invoices need to include the above additional information to enable South African business customers to recover the VAT charged to them by the non-resident digital service providers.

Contact Avalara's indirect tax specialists to discuss digital services and how we can assist with registration and returns.

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