SARS is very strict when it comes to tax invoices.
For example, you must ensure certain details appear on your tax invoice and you must adhere to certain requirements when making copies.
Basically, either you do things SARS' way or prepare to have SARS deny your input tax claim, face hefty penalties and endless audits.
Since that's a risk you can't afford to take, keep reading to find out what's acceptable when it comes to tax invoices.
Are there any inaccuracies in your tax invoices?
Have you ever thought about if:
Here's what you need to do…
Tax invoices 101: The following will stand up to SARS' scrutiny
#1: Your tax invoices must be in the correct format
The tax invoices you issue and receive must have the following details for SARS to consider them valid:
If, for example, you lose or misplace your original tax invoice, you can ask your supplier to give you a copy of the original. Here, the rule is he has to mark it clearly as a 'copy'.
If you photocopy an original tax invoice, you must mark it as 'copy' after photocopying.
In addition, if your supplier faxes a tax invoice to you, you must print it on plain paper so you won't lose the information on it.
What about email?
Your supplier can email you a copy of the invoice, with the word 'copy' printed on it.
If SARS asks you to sign this document... STOP! Put down that pen. You have the right to refuse
This is just one of the secrets you'll uncover in the Practical Tax Handbook.
Here are another 8:
#3: Sending tax invoices by email is acceptable
If you decide to take advantage of the convenience and cost-effectiveness of email and send tax invoices to your clients electronically, make sure you comply with the following requirements:
• Your clients must agree in writing that they're willing to accept electronic documents. Make sure you keep this agreement for five years.
• Your tax invoice must contain all the information detailed in point one.
• You must transmit the tax invoice in encrypted form of at least 128 bit encryption. This way, the document is secure and you'll avoid fraud because it won't be possible for crooks to interfere or tamper with it in any way.
• The electronic document will serve as the original tax invoice and you and your supplier must keep it safe for five years.
Remember, a tax invoice is the most important link in the VAT chain. If you get it wrong, you won't be able to claim input tax. What's more, SARS will hit you with penalties or audit your business.
Don't take chances. Make sure your tax invoices stand up to SARS' scrutiny now that you know what's acceptable.
Until next time,
Group Publisher: Fleet Street Publications
P.S. It's your responsibility to get valid tax invoices for purchases over R5 000 from your suppliers with your correct VAT registration number. Or you'll forfeit your refund. Here's how you can make sure it's valid…