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What's wrong with this invoice?

by , 20 October 2016
What's wrong with this invoice?We all know that you can claim input tax for any amount less than R5 000, with an abbreviated, or shortened tax invoice. This means the name, address and VAT number of the buyer doesn't have to appear on the tax invoice. Essentially, it can be made out as 'cash'.

Now have a look at this abbreviated tax invoice below. What do you think is glaringly wrong with it? Read on below...



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Are you sure that the tax invoices you receive are issued properly? 

Are all the SARS requirements on the tax invoice? Have you ever thought about it?
 
What if something is omitted from a tax invoice on which you've already claimed input tax?

Anyone who has ever experienced a SARS VAT audit will tell you the first thing the auditors check are your tax invoices!
 
To find out what errors NEVER to make on your tax invoices, and what the SARS auditor will look for at audit time, click here
 
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So what's wrong with the Oriental Plaza receipt?
 
Apart from the fact that the words tax invoice, the address and VAT number (possibly) isn't on it, it's only partially issued in one of the 11 official languages of this country. And there's no indication of the currency type – i.e. Rand, Zimbabwean Dollar or Pound! 
 
Did you know that it's a pre-requisite for the whole tax invoice to be issued in one of our official languages, and that it must be in Rand?

If you claim the input tax on this slip, do you think the SARS auditor will allow it?
 
And on the subject of the wording, if you held a document called 'VAT invoice' and claimed input tax as indicted on it, would the document be valid?
 
As a VAT consultant and previous VAT law administrator at SARS, I see so many vendors getting their invoicing wrong. And you'd be surprised to learn that even one of SA's biggest retailers has been guilty of this very same error!

Read on to see what's an acceptable tax invoice
 
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How to get your VAT documentation right – first time, every time

Did you know...that in the vast majority of cases SARS has issues NOT with your interpretation of the Act, or with fancy avoidance schemes, or even with complicated transactions, but with your documentation.

This is where the most disputes, investigations and all-out battles with the assessors arise – and the crazy thing is, it's all so avoidable.

You must get your documentation right, first time, every time.

Here's the only resource that will show you how with practical tips and explanations, checklists and actual examples of invoices and returns.
 
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Here's what's acceptable when it comes to tax invoices

The tax invoices you issue and receive must have the following details for SARS to consider them valid:
  • The word 'Invoice';
  • The name, address and VAT number of the supplier;
  • The name, address and VAT number of the buyer;
  • A serial number of the invoice;
  • The date;
  • A description and the mass or quantity of the goods bought;
  • The amount paid for the goods bought; and
  • The amount for the supply, the VAT and the total, 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). 
For a selection of sample invoices you can use, refer to your Practical VAT Loose Leaf. If you dont have a copy, you can get yours here

P.S. What keeps 93% of South African accountants awake at night? Find out here
   


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