This means that then he can issue a credit or debit note with the following information:
1. His company's name, address and Vat registration
2. Your name and address as the recipient of the electronic services;
3. The date he issues the credit or debit note;
4. A brief explanation of the circumstances giving rise to the credit or debit note.
5. The new consideration amount whether it's increased or decreased. And the tax
amount. If the consideration is in:
• Rands, the tax
invoice must show the new Vat
amount. Or it must have a statement that the consideration includes the new Vat
amount and the rate the Vat
was charged; or
• Any other currency, the tax
invoice must show the new amount of tax
in Rands. Or your supplier must give you a separate document, also showing the new amount of tax
in Rands; and
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6. The exchange rate used, which must be the same as the rate used in the tax
invoice (Section 21(5) of the Vat
Pay attention to the fact that if your supplier's credit note doesn't meet these criteria, SARS will disregard it completely. It will see it as if the credit note doesn't exist. This means the Vat
on the tax
invoice will become payable to SARS.
The exchange rate and value of supply is important too
If your supplier gives you a tax
invoice or a credit/debit note in a currency other than Rands, he must convert the tax
charged to Rands.
The exchange rate he must use to work out the tax
charged in Rands, is the rate published by either:
• The South African Reserve Bank at www.resbank.co.za/Research/Rates/Pages/SelectedHistoricalExchangeAndInterestRates.aspx;
• Bloomberg at www.bloomberg.com/markets/currencies/cross-rates;
• The European Central Bank at www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html.
He must use the exchange rate on the date the time of supply occurs. Or the monthly average rate for the month that the time of supply occurs.
The time of supply is the first of either:
• The issue of the invoice; or
• The supply of services whichever takes place first.
Also, pay attention to the fact that if your supplier doesn't follow these rules, SARS may see your tax
invoice as invalid and disallow your input tax
claim. And it will charge you fines and penalties for trying to claim input tax
without valid documentation.