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There are two types of tax invoices you can issue for foreign supplies. Make sure you issue the right one to avoid penalties!

by , 24 October 2014
You know you need a tax invoice whenever you get supplies so you can claim input tax. You also know you have to give tax invoices to anyone you sell goods or provide services to.

But what happens when you're dealing with foreign supplies? How do you invoice someone who's in a different country? After all, it's not like they operate under SA's tax laws.

Well it certainly doesn't mean you can get away with not invoicing them or doing it incorrectly because SARS still need these documents from you.

That's why you must use one of these two types of invoices for foreign supplies...


When invoicing for foreign supplies, use one of these two tax invoice types

When you deal with foreign clients, you have two ways to invoice them:
1. If your supply is zero-rated 
If your supply is zero-rated, issue the tax invoice in the foreign currency. (Vat Act, Section 20(4). Remember, you're only allowed to apply the zero-rate of Vat to certain goods and services.
You can find a list of these zero-rated supplies in the Practical Vat Loose Leaf Service.
2. If your supply isn't zero-rated 
Issue both abbreviated and full invoices in rands (but you can write the foreign currency equivalent on the invoice).
Get this wrong and you won't only be non-compliant with the Tax Administration Act (TAA), you'll get a hefty administrative penalty too! 
Here's why you need these tax invoices.
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Do you know how to:
•         Avoid a Vat Audit?
•         Claim every input tax credit?
•         Get your refund from SARS quicker?
You should. And you can. By reading this letter, it will tell you how to avoid costly Vat mistakes, save you money, time and be your CEOs favourite person when you save the company R1 000s of rands in Vat refunds this year.

This is why SARS requires you to issue tax invoices to foreign clients

SARS needs you to issue these documents so you can verify the amount of Vat you hand over to it. 
So issue your foreign clients correct tax invoices so you don't receive hefty penalties.

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