The Practical Vat Loose Leaf Service explains that sometimes, the amount of the supply is determined by the buyer, not the seller.
An example of this is where a farmer (the seller), takes produce to a co- operative that will only be sold once the quality and quantity of the produce has been determined.
As the price that'll eventually be reached for the goods depends on factors outside the farmer's control, the farmer can't issue a tax invoice for the produce when it's delivered for sale.
Another example's where a financial institution, such as a bank or insurance company, determines the commission payable to an agent or broker.
In such cases, SARS allows the co-operative (the recipient/buyer) to issue the tax invoice for the supply. This is referred to as 'recipient-created invoicing' or 'self-invoicing'.
As mentioned, you must get permission from SARS if you want to 'self-invoice'. To do that, you need to apply to SARS.
Include these four things when applying for self-invoicing
When applying to SARS for permission to self-invoice, remember to include the following details in your application:
To make sure you don't forget these points, here's a sample letter you can send to SARS to request the use of self-invoicing.
Including these four things in your application will help ensure your application for self-invoicing is successful.
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