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Are you an agent? Here's how to issue monthly statements to your principal that are in line with SARS strict standards

by , 25 March 2014
If you're an agent, you're legally required to issue monthly statements to your principal. It's important that you get this right because SARS won't have any mercy on you if you get it wrong. Read on to find out what to include in your monthly statements.

Agents have a legal duty to issue monthly statements to principals

In terms of Vat law, you (the agent) have a legal obligation to give your principal a monthly statement that details all the supplies you received on his or her behalf.

If you've forgotten what a principal is, this is a person or a business that authorises an agent to act on its behalf and engage into transactions with third parties that are contractually and legally binding.

When it comes to monthly statements, you have a deadline to meet of 21 days after the end of the calendar month and must have accounted to your principal by this time.

And every month, your report must include details of the following information…

*****************

Any person who is liable to register for Vat but fails to do so is guilty of an offence and may be liable to a fine or two years imprisonment.

Don't get caught out!

*****************


If you're an agent, make sure you include the following info when you issue monthly statements to your principal

The Practical Vat Loose Leaf Service says your monthly statements must have:

  • A full and proper description of goods or services;
  • The quantity or volume involved; and
  • The price and rate of Vat charged, or if the rate of Vat isn't shown, then indicate the amount of Vat included in the price.

What happens when you've given your principal the monthly statement?

When you've issued your principal the monthly statement, he can then use this statement to support his input tax claims.
Note: When selling goods or services on behalf of a principal, give him the all these details so he can also correctly declare output tax.

Remember you're not allowed as an agent to claim input tax or declare output tax on supplies made to or on behalf of your principal. Just give him the monthly statements and he'll do the rest.

Knowing how to issue monthly statements to your principal as an agent will help ensure you comply with Vat law.



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