South Africa — SARS, eFiling and dematerialised VAT

South Africa has operated the SARS eFiling platform since 2003, one of the oldest tax tele-filing solutions in the world. The country does not (yet) have a B2B e-invoicing mandate, but SARS published a discussion paper on VAT modernisation in 2024, opening the way to medium-term continuous transactional controls.

Regulatory timeline

• 26 July 2002 — Electronic Communications and Transactions Act 25 of 2002 (ECTA). South African legal framework for electronic signature, electronic data and electronic commerce. Recognises advanced signature and accredited certificates.
• 14 August 2003 — SARS eFiling launch. Public tax tele-filing platform, initially for VAT and CIT of large enterprises.
• 4 July 2011 — Tax Administration Act 28 of 2011. Unified legal basis for tax administration, formalises eFiling as the official channel.
• 1 March 2014 — eFiling generalisation. eFiling mandatory for taxpayers above turnover thresholds, and for nearly all employers (EMP201, EMP501, IT3 returns).
• 1 March 2018 — VAT 15 %. VAT rises from 14 % to 15 %, first increase since 1993. Major impact on VAT201 schemas and transaction files.
• 1 July 2022 — IT3(d) tax-free savings. New submission type for tax-free savings accounts (TFSA), extended SARS XML schema.
• 14 March 2024 — VAT Modernisation Discussion Paper. SARS publishes a discussion paper on VAT modernisation, mentioning continuous transactional controls (CTC), SAF-T-like and a medium-term e-invoicing mandate (2027+).
• 2025-2026 — Public consultations. SARS / SAICA / industry consultation period on the e-invoicing schedule and format. No legislative decision as of mid-2026.

Technical schema

The dominant format is the SARS Modernised XML used for eFiling submissions (VAT201, EMP201, EMP501, IT3 series, ITR12, ITR14). Features:

• Tax Reference Number: 10 digits, uniquely identifies the taxpayer; VAT vendor number starts with 4 and has 10 digits.
• VAT201: monthly or bi-monthly VAT return depending on turnover. XML schema with input VAT / output VAT / VAT payable (or credit) fields.
• IT3 series: IT3(a) PAYE salaries, IT3(b) interest / dividend income, IT3(c) capital gains, IT3(d) tax-free savings. Submitted annually by third-party payers.
• Connect:Direct (CDS): IBM protocol used by banks and large employers to exchange massive volumes with SARS outside eFiling.
• VAT supplier name tag + tax invoice number: even without an e-invoicing mandate, VAT201s reference an aggregated transactional counter.

Example IT3(a) PAYE:

<?xml version="1.0" encoding="UTF-8"?>
<sars:SubmissionEnvelope xmlns:sars="http://www.sars.gov.za/eFiling/Modernised"
                         version="2.0">
  <sars:Header>
    <sars:SubmissionDateTime>2026-05-16T10:30:00+02:00</sars:SubmissionDateTime>
    <sars:SubmitterReference>EDI-2026-IT3-04</sars:SubmitterReference>
    <sars:DataType>IT3a</sars:DataType>
    <sars:TaxYear>2026</sars:TaxYear>
    <sars:DeclarantPin>0123456789</sars:DeclarantPin>
  </sars:Header>
  <sars:Records>
    <sars:IT3aRecord>
      <sars:TaxRefNumber>9123456789</sars:TaxRefNumber>
      <sars:Surname>Smith</sars:Surname>
      <sars:Initials>J K</sars:Initials>
      <sars:IDNumber>8001015009087</sars:IDNumber>
      <sars:IncomeSourceCode>3601</sars:IncomeSourceCode>
      <sars:IncomeAmount>250000.00</sars:IncomeAmount>
      <sars:PAYE>45000.00</sars:PAYE>
      <sars:UIF>2500.00</sars:UIF>
      <sars:SDL>1250.00</sars:SDL>
    </sars:IT3aRecord>
  </sars:Records>
  <sars:Signature>...</sars:Signature>
</sars:SubmissionEnvelope>

Submission flow

The taxpayer logs into sarsefiling.co.za with their eFiling profile (login + OTP), accesses the relevant form (VAT201, EMP201, IT3, ITR14…), enters or imports the XML, checks and submits. SARS validates in real time and generates a submission Acknowledgement.

┌──────────────┐    ┌────────────────────┐    ┌──────────────┐
│ Employer /   │───>│ SARS eFiling       │───>│ SARS         │
│ taxpayer     │    │ (sarsefiling.co.za)│    │ (validation, │
│ (SARS XML)   │    │ or Connect:Direct  │    │  case)       │
└──────────────┘    └─────────┬──────────┘    └──────────────┘
                              │
                              ▼
                  ┌────────────────────┐
                  │ No B2B e-invoicing│ ← Public
                  │ mandate (in       │   consultation
                  │ consultation)     │   2024 + paper
                  └────────────────────┘

For EDI flows (large employers, banks issuing IT3 by the million), the Connect:Direct (CDS) protocol is used in B2G for massive batch submissions. No B2B e-invoicing clearance model to date: invoices remain in free circulation (paper, PDF, bilateral EDI) until SARS publishes a mandate.

Validation

• SARS: sars.gov.za — official site, forms, XML schemas, tax calendars.
• SARS eFiling: sarsefiling.co.za — tele-filing portal, taxpayer and preparer access.
• SARS VAT Modernisation Discussion Paper (2024): sars.gov.za/value-added-tax — publications on VAT modernisation and e-invoicing options.
• SAICA (South African Institute of Chartered Accountants): saica.org.za — professional federation, position papers on VAT modernisation.

Common pitfalls

1. No e-invoicing mandate — but strict VAT201 traceability. Although there's no B2B clearance, the monthly VAT201 requires fine reconciliation between input / output VAT and issued / received invoices. A SARS audit may request production of source invoices; 5-year archival (Section 29 VAT Act) remains mandatory.
2. VAT Modernisation — fuzzy schedule. The 2024 discussion paper doesn't commit SARS to a firm schedule. 2025-2026 consultations explore several options (CTC, SAF-T, optional e-invoicing). Don't overestimate the speed of the mandate: the realistic horizon is 2028-2030 for a B2B obligation.
3. VAT vendor registration thresholds. VAT registration obligation from 1 million ZAR turnover over 12 rolling months. Below, voluntary registration possible but not systematic. Check the partner's VAT vendor status before issuing a formal "tax invoice".
4. Connect:Direct legacy. The IBM CDS protocol has been used in production by banks and large employers for 20 years. Migration to SARS REST API is under way but incomplete; for large IT3 volumes, plan a CDS integration via gateway.
5. 11 official languages. South Africa recognises 11 official languages (Afrikaans, English, isiZulu, isiXhosa, sePedi, seSotho, seTswana, siSwati, tshiVenda, xiTsonga, isiNdebele). English dominates for SARS, but ERPs must support UTF-8 for names and addresses in the other languages.

Cross-links

• EN 16931 — European semantic comparison.
• SAF-T explained — OECD standard, option mentioned by SARS.
• Nigeria — another major African market with FIRS and rolling-out e-invoicing.
• Kenya — East African country with eTIMS since 2023.
• Ghana — West African country with GRA e-VAT.
• Official sources: sars.gov.za, sarsefiling.co.za, saica.org.za.