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Do you really need a tax invoice?

by , 18 January 2013
Do you really need a tax invoice?As a business owner, you can't take tax invoices for granted: Forget to issue them or omit them from your monthly Accounting reconciliations and you'll land your company in big trouble with SARS. But there are a few instances when having a tax invoice isn't necessary. Here's a quick look at the ins and outs of tax invoice you need to know about...

Did you know that you don't need a tax invoice for transactions below R50?

It's true, in fact, according to The Practical Vat Loose Leaf Service, you only need a tax invoice if the Vat consideration (i.e. the price plus the Vat) exceeds R50. Although if the consideration amount is less than R50, you'll still need to keep the till slip or petty cash slip as proof for your input tax claim.

If, on the other hand, the Vat consideration for the item or service exceeds R50, you will need a tax invoice. Although bear in mind that if the Vat consideration is more than R50 but less than R3 000, an abridged tax invoice is acceptable. For items of services where the Vat consideration is above R3,000 a full tax invoice is necessary.

What does a tax invoice need to include?

According to the editors of the Practical Vat Loose Leaf Service, for a tax invoice – regardless of whether it's an abridged version of not – to be valid in terms of the Vat Act, eight items must be reflected on the document:

  1. The words 'Tax Invoice'
  2. The name, address and Vat number of the supplier (the Vat number will be a 10 digit number starting with 4)
  3. The name, address and Vat number of the purchaser
  4. A serial number of the invoice
  5. The date
  6. A description and the mass or quantity of the goods bought
  7. The amount paid for the goods bought
  8. The amount of Vat, or 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)

So there you have it, now you know exactly when you need a tax invoice and the details it must include to be deemed valid by SARS.

In the Practical Vat Loose Leaf we've got a dedicated chapter on tax invoices, in this chapter you'll discover...
  • What's the difference between a regular invoice and a tax invoice         
  • Checklist: When you'll need a tax invoice            
  • 8 Requirements for a valid tax invoice             
  • 3 Ways to show the Vat amount on a tax invoice        
  • Differences between full and abridged tax invoices      
  • Examples of valid invoices, tax invoices and abridged invoices
  • And much more!           
Get your copy of the Practical Vat Loose Leaf  today!

For more about tax invoices, read:

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