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If you charge Vat at the zero-rate and issue a zero-rated tax invoice, keep these seven documents to pass SARS' inspection

by , 23 September 2014
When you deal with foreign clients, you have two ways to invoice them.

1. If your supply is zero-rated, you can issue the tax invoice in the foreign currency.
2. If your supply isn't zero-rated, you must issue both abbreviated and full invoices in rands.

For the purposes of this article, we'll deal with issuing a zero-rated tax invoice because it's often misunderstood. And this misunderstanding leads to hefty SARS penalties.

Now, in terms of Vat law, if you charge Vat at the zero-rate and issue a zero-rated tax invoice, you must keep a list of standard documents. This so you can prove to SARS you were entitled to charge 0% Vat.

Read on to find out what these documents are so you can pass SARS' inspection with flying colours.


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Here are the documents you must have for zero-rated supply tax invoices to pass SARS' inspections
 

You must have:
 
  • An order or contract with your client that proves you've agreed to supply zero-rated goods or services;
 
  • A copy of the zero-rated tax invoice;
 
  • Proof of payment;
 
  • Form F178 – exchange control declaration; and
 
  • The following three Vat forms particular to the relevant supply:
 
  1. Vat 266 – Declaration of goods (including fuel) supplied at the zero-rate.
  2. Vat 262 – Zero-rating for services or repairs to goods.
  3. Vat 267 – Declaration for goods and services supplied and delivered/rendered to a Customs Controlled Area Enterprises (CCAE).
 
Find out more about these three vat forms in the Practical Vat Loose Leaf Service.

If you charge Vat at the zero-rate and issue a zero-rated tax invoice, make sure you keep these documents. This is the key to passing a SARS inspection.



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