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Is your tax invoice valid?

17 April 2013   (1 Comments)
Posted by: Author: Charl Geldenhuys
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Source: Charl Geldenhuys

A tax invoice is a special document which is required by vendors in order to claim input taxes. A supplier, being a registered vendor, must within 21 days after making a taxable supply issue a tax invoice to the recipient. It is not lawful to issue more than one tax invoice per taxable supply. If a vendor claims to have lost the original tax invoice, he then may be issued with a copy which should clearly be indicated as a copy.

At this point it is important to distinguish between the two different tax invoices that are available namely:

1.    The full tax invoice, and
2.    The abridged tax invoice.

Full Tax Invoice

This is applicable to taxable supplies made with a value of R3 000 or more. The tax invoice should be in the South African currency (Rand) and must contain the following:

1. The words "tax invoice” in a prominent place;
2. The name, address and VAT registration number of the supplier;
3. The name, address and VAT registration number of the recipient (if he is a vendor);
4. An individual serialised number and the date upon which the invoice is issued;
5. A full and proper description of the goods or services;
6. The quantity or volume of the goods or services supplied; and
7.1 Either, the value of the supply, the amount of tax charged and the consideration for the supply; or
7.2 Where the amount of tax charged is calculated by applying the tax fraction to the consideration, the consideration for the supply and either the amount of the tax charged on the supply or a statement that states the tax charge of 14% is included.

Abridged Tax Invoice

This is applicable to taxable supplies made with a value of not exceeding R3 000. The tax invoice should be in the South African currency (Rand) and must contain the following:

1. The words "tax invoice” in a prominent place;
2. The name, address and VAT registration number of the supplier;
3. An individual serialised number and the date upon which the tax invoice is issued;
4. A description of the goods or services provided; and
5.1 Either the value of the supply, the amount of tax charged and the consideration for the supply; or
5.2 Where the amount of tax charged is calculated by applying the tax fraction to the consideration, the consideration for the supply and either the amount of the tax charged on the supply or a statement that states the tax charge of 14% is included.

A supplier shall not be required to provide a tax invoice if the total consideration for the supply is in money and does not exceed R50. If the sale is to an individual who is not registered for VAT, the space on the tax invoice dedicated for the customer’s VAT number may be left open or marked with the words "non-vendor”.

Tax invoices must be issued with correct details including the VAT registration number of the customer. It is considered an offence when not including the customer’s VAT number when he provided it for you. The customer will not be able to claim the input tax if the tax invoice issued to him is incomplete or incorrect.

Therefore, it is important to take the necessary care when preparing your tax invoices and assisting your suppliers with theirs, as you may run the risk of not being able to claim the input taxes when the tax invoice is incorrect.

List of References

Anon. 2013. VAT tax invoices, [Online] Available from: http://www.sars.gov.za/home.asp?pid=4721 [Accessed: 17-04-2013].

South Africa. 1991. Value-added Tax Act, No.89 of 1991:912

Appendix: Example of a valid tax invoice


Comments...

Michael Gilmour William M. White says...
Posted 17 April 2013
The threshold for issuing an abridged tax invoice has been increased from amount not exceeding R3000.00 to an amount not exceeding R5000.00 with effect from 20 December 2012. Refer section 29 of the Taxation Administration Laws Amendement Act 2012 and SARS VAT Connect newsletter 2 of January 2013 .

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