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Are you SURE you're issuing and receiving valid tax invoices?

by , 18 July 2013
All tax invoices, both received and issued have to comply with the requirements of the Vat Act if they're for a value greater than R5 000. Read on to discover the eight requirements of a valid tax invoice so you can avoid a two year jail term or a fine of R80 000.

'The most important link in the Vat chain is the Tax invoice. Get it wrong and you won't be able to deduct input tax on your purchases,' says the Practical Vat Loose Leaf Service.

To ensure you're not liable for penalties, make sure you issue and receive watertight tax invoices that adhere to these requirements.

Eight requirements of a valid tax invoice

Requirement#1:  The words 'Tax Invoice', 'Credit Note' or 'Debit Note', depending on the document required.

Requirement#2:  The name, address and Vat number of the supplier (the Vat number will be a ten digit number, starting with '4'). SARS sends you your Vat number when you register for Vat;

Requirement#3:  The name, address and Vat number of the purchaser. If you sell to someone that isn't a vendor, leave it open;

Requirement#4:  A serial number of the invoice;

Requirement#5:  The date the product/service was issued;

Requirement#6:  A description and the mass or quantity of the goods bought;

Requirement#7:  The amount paid for the goods bought; and

Requirement#8:  The price of the goods, the amount of Vat and the total, or one amount including the Vat, but then 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 must appear on the tax invoice).

Ensure you issue and receive tax invoices that stick to these requirements.

 



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