SARS Requirements

It is accepted that tax invoices, credit or debit notes may be issued not only as paper documents, but also as electronic documents. Sections 20 and 21 of the Value-Added Tax Act, 1991, refers to a “document” without stipulating that a tax invoice must be hard copies.
The South African Revenue Service’s requirements in regard to electronic tax invoices, credit and debit notes are as follows:

• The tax invoices, debit or credit notes must contain the mandatory information for tax invoices, credit or debit notes as stipulated in sections 20(4), 21(4)(a) and 21(4)(b) respectively.
• Documents must be transmitted in encrypted form at least 128 bit encryption format.
• Both the supplier and the recipient of the supply must retain the documents in readable and encrypted form for a period of five years from the date of the supply.
• If a service provider is used, he must also retain the documents for a period of five years.
• Both the supplier and the recipient of the supply must have the necessary codes or other means available to enable SARS auditors to compare the documents in readable form with those in encrypted form.
• The transmitted electronic document will constitute the original tax invoice, credit or debit note. Hard copies extracted from the system must bear the words “computer generated copy tax invoice”, “computer generated copy credit note” or “computer generated copy debit note” thereon. All further copies must also bear such words.
• The recipient of the supply must confirm in writing that he is prepared to accept electronic tax invoices, credit and debit notes under the conditions set out herein. Such authority must be retained by the supplier for a period of five years after the last electronic document issued to the recipient.
• No other tax invoice, credit or debit note may be issued in respect of the specific supply, unless such document is marked as a copy of the original document.
• The recipient of the supply must satisfy himself that the supplier complies with the South African Revenue Service’s requirement in regard to electronic tax invoices, credit and debit notes. Failure to do so will render input tax claims on the strength of such documents invalid.

COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE ab 197.1