The key difference: a tax invoice is issued by a VAT-registered business and includes VAT at 15%, with specific fields required by SARS. A standard invoice is issued by any business (VAT registered or not) as a general request for payment. If your business is not VAT registered, you issue standard invoices. If you are VAT registered, you must issue tax invoices for taxable supplies.
What is a standard invoice?
A standard invoice is a document requesting payment for goods or services. There is no SARS-prescribed format for a standard invoice. It typically includes:
- Your business name and contact details
- Your client’s name and details
- An invoice number
- The invoice date
- A payment due date
- A description of services or goods
- The amount owed
- Your banking details
Standard invoices do not include VAT and do not need to display the words “Tax Invoice.” They are issued by businesses that are not VAT registered.
What is a tax invoice?
A tax invoice is a SARS-regulated document issued by a VAT-registered business. It records a taxable supply and allows the client to claim back the VAT they paid (input tax). SARS prescribes exactly what must appear on a tax invoice.
The words “Tax Invoice” must appear on the document. VAT at 15% must be calculated and shown separately. Your VAT registration number must be included.
For a full breakdown of all 15 required fields, see What Must Appear on a SARS-Compliant Tax Invoice?
Side-by-side comparison
| Feature | Standard invoice | Tax invoice |
|---|---|---|
| Who can issue it | Any business | VAT-registered businesses only |
| Words on document | ”Invoice" | "Tax Invoice” |
| VAT registration number | Not required | Required |
| VAT amount | Not included | Shown separately at 15% |
| Client VAT number | Not required | Required for transactions R5,000+ |
| SARS regulated fields | No | Yes (8 or 15 fields) |
| Can client claim input VAT? | No | Yes |
Quick answer
What is the difference between an invoice and a tax invoice in South Africa?
In South Africa, the difference between an invoice and a tax invoice comes down to VAT registration. A standard invoice is any document requesting payment for goods or services. It has no specific SARS-prescribed format and does not include VAT. A tax invoice is issued by a VAT-registered business, must display the words “Tax Invoice,” must include the supplier’s VAT registration number, and must show the VAT amount (at 15%) separately from the base price. Only a tax invoice allows the recipient to claim back the VAT they paid as input tax. If your business is not VAT registered (typically because turnover is under R1 million per year), you must issue standard invoices and may not charge VAT. Using the words “Tax Invoice” when you are not VAT registered is a SARS compliance violation.
Which document should you issue?
The decision depends entirely on whether your business is VAT registered:
Not VAT registered (turnover under R1 million/year)? Issue standard invoices. Do not include VAT. Do not use the words “Tax Invoice.”
VAT registered? Issue tax invoices for all taxable supplies. You must charge 15% VAT and include all SARS-required fields.
Unsure whether to register for VAT? See Should I Register for VAT in South Africa?
What about proforma invoices?
A proforma invoice is a preliminary document sent before the work is done. It is an estimate or quote, not a request for payment. Proforma invoices are not subject to SARS tax invoice requirements, but they should be clearly labelled “Proforma Invoice” to avoid confusion.
Once the work is complete, you replace the proforma invoice with a proper tax invoice or standard invoice.
Other invoice types in South Africa
| Document | Purpose |
|---|---|
| Invoice | Request for payment (non-VAT vendor) |
| Tax invoice | SARS-compliant request for payment (VAT vendor) |
| Proforma invoice | Estimate or quote before the sale |
| Credit note | Cancels or reduces a previously issued (tax) invoice |
| Debit note | Requests additional payment when an original invoice was too low |
| Statement of account | Summary of all outstanding invoices for a client |
For more on how quotes and invoices differ, see Quote vs Invoice in South Africa.
Frequently asked questions
Can I change a standard invoice to a tax invoice later?
If you become VAT registered after issuing a standard invoice, you cannot retroactively convert it to a tax invoice for supplies that occurred before your VAT registration date. You may only charge VAT on supplies made after your registration date. Invoices for pre-registration supplies remain as standard invoices.
What if a client asks me for a tax invoice but I am not VAT registered?
You cannot issue a tax invoice if you are not VAT registered. You can explain to your client that you are not VAT registered and provide a standard invoice. Some clients, particularly large corporates, prefer to work with VAT-registered suppliers. If this is affecting your business significantly, you may want to consider voluntary VAT registration.
Does the document have to say 'Tax Invoice' in those exact words?
Yes. SARS requires the words 'Tax Invoice' to appear on the document. Using alternatives like 'VAT Invoice,' 'Fiscal Invoice,' or just 'Invoice' is not compliant. The wording must be 'Tax Invoice' exactly, and it must be prominent enough that the document is clearly identifiable as such.