Common invoice mistakes businesses make
#1: They issue standard rated invoices in foreign currency, not in Rands. This is wrong because exchange rates fluctuate. So the Vat might be higher on the invoice when the currency changes. This puts you in a situation where you're out of pocket;
#2: They don't include the recipient's Vat number;
#3: They incorrectly label the document as "Vat invoice" instead of "Tax invoice". SARS will disallow any input tax claimed on a document called "Vat invoice";
*********** High Rated Product ***************
Are there any inaccuracies in your Vat invoices? You may be charged a very high penalty!
If SARS finds inaccuracies, you'll be assessed, held liable to penalties, interest and possibly even additional tax!
Click here to find out how to make sure your Vat invoices are 100% legal.
#4: The incorrect trading name of the recipient appears on it. SARS may disallow the input tax deduction if the invoice is made out to someone else (and it's not in terms of the agent/principal relationship); or
#5: They don't mark copy tax invoices as a "copy". If you do this, SARS will think you've issued more than one original tax invoice. And it will penalise you as the supplier.
What to do if you receive tax invoices with any of these errors…
Get onto your suppliers to credit the incorrect invoices you have and re-issue proper tax invoices. If you've made the mistakes, credit the incorrect invoices and re-issue proper tax invoices. If you don't, SARS will penalise you for these mistakes.
In addition to this, let's take a look at what to do with zero-rated invoices:
Make sure the zero-rated tax invoice you issue to a nonresident contains the following details:
- Physical address of the non-resident in the foreign country; or
- Postal address of the non-resident; or
- Both the physical and the postal address of the nonresident;
- Vat shown as zero percent (0%); and
- All the other details a tax invoice would normally show, including:
- The words "tax invoice";
- The name, and Vat number of the supplier;
- An individual serial number;
- The date when the tax invoice is issued;
- Full and proper description of the goods (indicating, where applicable, that the goods
are second-hand goods) or services supplied;
- The quantity or volume of the goods or services supplied;
• The amount of the supply, the Vat at zero-rate, and the total; or
• The total amount of the supply, including Vat, and a statement on the invoice that says that Vat is zero-rated; and
- If it's a zero-rated export, then the invoice doesn't have to be in Rands. You have the option to insert an amount in a foreign currency.