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You've registered for Vat as a foreign company. What now?

by , 23 February 2015
So you're a non-resident company that supplies goods in South Africa.

When you realise your supplies exceed R1 million during a 12 month period, you appoint a Vat representative and register for Vat. After all, you know that anyone who must register for Vat but doesn't, is guilty of an offence. And you certainly don't want to get an R80 000 fine or two years in jail.

Now you're wondering what's next.

Read on to find out what your Vat duties are after you register for Vat so you can comply and avoid SARS penalties.

After you register for Vat, stick to these three duties

You must:
1. Submit your Vat returns and payments on time
After you register for Vat, SARS allocates a tax period to you. You have to submit your Vat returns and account for Vat according to the tax period SARS gives you.
Bear in mind that subtracting the input tax (on purchases) from the output tax (on sales), in a particular tax period determines your company's Vat liability.
2. Keep accurate accounting records for five years
Your company must keep accounts of purchases and sales to calculate the Vat due to SARS. The accounts also give SARS the right to check that you calculate, charge and pay Vat correctly.
Here are the records you must keep:
  • Records of all goods and services your company supplies;
  • A record of importation and exportation of goods; and
  • Charts and codes of accounts, an instruction manual on your accounting system and documents that describes your accounting system.
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3. You must also issue valid tax invoices, debit and credit notes
For your tax invoices to be valid, make sure they contain these details:
  • The words 'tax invoice' in a prominent place;
  • A serial number and date for issuing the tax invoice;
  • A description of the goods or services supplied;
  • The quantity or volume of the goods or services supplied; and
  • The value of the supply, amount of tax charged and the consideration for the supply.
Remember, your tax invoice must show the price and Vat in South African currency, except where you're dealing with a zero-rated supply. If you charge your customers in a foreign currency, show the rand amount and Vat in rands.
Special rules don't only apply to tax invoices. When it comes to debit and credit notes, the rules are they must have:
  • The words 'debit note' or 'credit note' in a prominent place;
  • The name and address of the recipient. If the recipient is a Vat vendor, give his Vat registration number;
  • The date you're issuing the debit or credit note;
  • The amount by which you've altered the value of the supply and the Vat charged;
  • Reasons detailing why you're issuing the note ( SARS wants to know what situation forced you to issue the note); and
  • Enough information to identify the transaction to which the note refers.
These are just some of your Vat duties once you register for Vat. To find out what your other duties are, check out the Practical Vat Loose Leaf Service so you can comply and avoid SARS penalties.

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