All value-added tax (VAT) vendors that have gone through a VAT verification from the South African Revenue Service know how frustrating the delays on input VAT refunds can be when supporting documents do not meet the requirements for a valid tax invoice. Below, we revisit some of the necessary key elements to ensure proper compliance in this regard.
The VAT Act identifies different transactions that each requires different types of tax invoices:
Commercial invoice versus VAT invoice: the differences
This can be any document, notifying the purchaser to make payment in respect of a transaction.
Full tax invoice
A full tax invoice must contain the following particulars:
Recently, SARS auditors have focused their attention on the “full and proper description of the goods and/or services” element of tax invoices. This is particularly apparent when invoices only contain information such as “service rendered” or “goods supplied”. These descriptions lack a proper description, and SARS would be well within their rights to regard such invoices as not meeting requirements. Vendors must be cautious on this aspect where invoicing systems merely pull through stock codes or data fields onto tax invoices. Such inadvertent matters could result in a vendor not issuing valid tax invoices.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)