The
Vat gurus behind the
Practical Vat Loose Leaf detail six criteria electronic invoices MUST meet.
SARS only accepts electronic invoices if they meet the following six criteria
1. The following eight items must appear on the invoices (as is the case for all invoices):
1. The words 'Tax Invoice'; 'Credit Note' or 'Debit Note', depending on the document required.
2. The name, address and
Vat number of the supplier (the
Vat number will be a ten digit number, starting with '4'). SARS sends you your
Vat number when you register for
Vat. Watch out for invoices where
Vat has been charged and the supplier has no
Vat number or the words 'vat number pending' appears on the
tax invoice! In such cases, do NOT pay the
Vat to the supplier as you will have an invalid document on which you can't claim the input
tax!
3. The name, address and
Vat number of the purchaser. If you sell to someone that isn't a vendor, leave it open.
4. A serial number of the invoice.
5. The date the product/service was issued.
6. A description and the mass or quantity of the goods bought.
7. The amount paid for the goods bought.
8. The price of the goods, the amount of
Vat and the total, or one amount including the
Vat, but then 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 must appear on the
tax invoice).
2. Recipients must confirm in writing that they're willing to receive electronic
tax invoices. You must keep this written confirmation on record for five years. Your electronic
tax invoices must be issued encrypted with 128-bit encryption technology, this basically means in a tamper proof format which will make it impossible to be tampered with or altered it in any way.
3. Both seller and buyer must keep the documents in a readable and encrypted form for five years from the date of submission of the
Vat return. Readability is only a problem when suppliers use certain software programs to create invoices that require you to have an application installed on your PC to view the invoice.
4. If you use a service provider, like your Internet, software application and telecommunication providers, that person must also keep the documents for five years.
5. The transmitted electronic document counts as an original
tax invoice. If you print out hard copies of this, they must state 'Computer-generated copy
tax invoice'. All further copies must also state this.
6. No other
tax invoice may be issued for the supply, unless it's marked as a copy of the original document.
When your new
tax period starts, open a file on your computer for that period. As you receive invoices during the month via email, save the invoice that's attached directly in this file in the encrypted 'PDF' format. Do the same for invoices that you have to go into a supplier's website to retrieve an invoice or need a copy. All the invoices you received electronically during that
tax period will be in one place which is easy accessible, in the right format and can be easily backed up and stored for 5 years.
Now you know exactly how to keep SARS happy!
