If you claim input tax, your SARS VAT audit is impending
And when the SARS auditor comes knocking or sends a query, he'll check if:
· Your books and records comply with the requirements of Section 55 of the VAT Act;
· You didn't claim on exempt supplies;
· Any of your claims were for non-taxable supplies;
· You apportioned inputs correctly and at the right tax rate (Sections 16, 17 and 20
of the VAT Act);
· And more!
But the truth is, even if you're entitled to your claim, but don't have the valid documentation, he'll still reverse your deduction!
Here's everything you need to secure every input tax claim you submit.
Three rights you can exercise when SARS wants to audit you…
When SARS wants to audit you, they must send you a reasonable notice in writing. In it, they must clearly state what type of audit it is, and when exactly they'll conduct it.
Normally, they'll also send you an extensive list of the documents you must put together for them. They'll also let you know how far back they'll check (usually three to five years), up until the most recent tax year assessed.
When SARS sends you the notice of the audit, you must send SARS a letter asking for copies of the SARS letter of authorisation, given by a senior SARS official, to the auditors.
If the letter of authorisation isn't produced, then you can assume the auditors don't have authorisation to conduct the audit.
Keep reading to see what your third right is…
The key to getting through a SARS audit is preparing for it before your unwelcome guests arrive
Click here for more details…
When the auditors arrive to conduct the audit, ask them to produce their identity cards.
If they can't produce their identity cards, or if they aren't the people who were given authorisation to conduct the audit (as is stated in the letter of authorisation), then you can safely assume that they are either not SARS officials or, even if they are, don't have authorisation to conduct the audit.
To learn what your other rights are when SARS wants to conduct an audit on you, simply check out Chapter A 03: Audit Rights in your Practical Tax Loose Leaf Service
handbook, or click here
to order your copy today.