HomeHome SearchSearch MenuMenu Our productsOur products

Zero-rating: Get it right or face harsh penalties

by , 24 April 2014
When you charge Vat at the zero-rate, you must prove to SARS that you were entitled to do so with a valid tax invoice. If you don't, it'll charge you additional penalties and interest. Let's look at the practical example below that shows the penalties that'll come your way if you get your zero-rating wrong.

******************

Errors in Vat invoices could cost you thousands!

Are there any inaccuracies in your Vat invoices? You may be charged a very high penalty!

Click here to find out how to make sure your Vat invoices are 100% legal.

 

******************

If you think getting zero-rating wrong is harmless, think again…

Let's say Mr X sells foodstuffs at the zero-rate of Vat.

The invoice total is R10 000.

Two months later, SARS asks Mr X to show them what food was sold at the zero-rate. But, Mr X fails to give SARS an invoice.

As a result, SARS issues an assessment. And it calculates the assessment as follows:

R10 000 x 14/114 = R1 228.00 Vat. This means Mr X now has to pay to them this, plus a 10% penalty of R122.80 and interest of R34.80 (using the interest rate of 8.5% pa).

This means Mr X will end up paying R1 385.60!

In this ailing economy, that's a lot of money. So make sure you get your zero-rating by doing the following…

****************

Think Vat doesn't apply to your payroll? You're wrong!

Avoid this common error and keep SARS away from your door at audit time.

 

****************

Here's what you must do to get your zero-rating right every time

If you charge Vat at the zero-rate, you must have all your documentary proof 100%. This means you must have a valid tax invoice.

That's not all. You must also be aware of the 16 goods/items you can claim zero-rate on and the documentary proof you require for each one of them. So be sure to get the Practical Vat Loose Leaf Service. It has a breakdown of these items and the documents you must keep to get your zero-rating right so you can avoid penalties.

Vote article

Zero-rating: Get it right or face harsh penalties
Rating:
Note: 5 of 1 vote


Related articles




Related articles



Related Products