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Tax invoices 101: Here's what's acceptable when it comes to tax invoices

by , 16 June 2017
The following in tax invoices will stand up to SARS' scrutiny
Are there any inaccuracies in your tax invoices?
If SARS asks you to sign this document... STOP! Put down that pen. You have the right to refuse

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.
 
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Are there any inaccuracies in your tax invoices? 
 
Have you ever thought about if:
  • The tax invoices you receive are issued properly; and
  • All the SARS requirements are on the tax invoice?
If they aren't accurate, you could be liable for penalties, interest and even prosecution!
 
Here's what you need to do…
 
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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:
  • The words 'Tax Invoice' (and not 'Vat Invoice');
  • The name, address and Vat number of the supplier;
  • The name, address and Vat number of the buyer;
  • A serial number of the invoice;
  • The date;
  • A description and the mass or quantity of the goods bought;
  • The amount paid for the goods bought; and
  • The amount for the supply, the Vat and the total, or a statement that Vat is included in the price and the rate at which it was charged (i.e. either 0% if zero-rated, or 14% if standard-rated).
#2: Copies are acceptable as long as you obey these rules

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.
 
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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:
  • What R5 000 can do to boost your annual deductions, and how to maximise its effect
  • The ONLY way you'll NEVER pay donations tax
  • Use your company car in these three ways and you WON'T pay tax
  • The 22 little known allowances that you could deduct so you pay less tax
  • The seven expenses you incur for legal activities that you can claim deductions on
  • A three-point checklist that guarantees the repairs you make to your office, machinery or tools will qualify as a deduction
  • The three ways to deduct your bad debts
  • Seven expenses to always include in your travel claim to maximise your tax savings
Click here to get your hands on these secrets.

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#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,


 
Annabel Koffman,
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…
 
 

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