Using one company’s VAT number on the tax invoices of another company
29 October 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: Our client’s company
is applying for liquidation and one of the directors is using the VAT number of
the liquidating company on invoices of a new company that has been formed.
Please advise on the implications of such an action.
A: Please note
that the service offered by SAIT is limited to guidance and no advice can
therefore be provided. The issue raised is also technically not tax related. The
following may be relevant to the issue raised:
Section 20(1) of the Value-Added Tax Act requires that,
except as otherwise provided in section 20, a supplier, being a registered
vendor, making a taxable supply to a recipient, must within 21 days of the date
of that supply issue a tax invoice containing such particulars as are specified
in section 20.
The section requires that both the full tax invoice and the
abridged tax invoice must contain the VAT registration number of the
Section 234(g) of the Tax Administration Act provides that a
person, who wilfully and without just cause issues an erroneous, incomplete or
false document required to be issued under a tax Act to another person is
guilty of an offence and, upon conviction, is subject to a fine or to
imprisonment for a period not exceeding two years.
We submit that the director is committing an offence by
issuing the invoices with the VAT registration number of the other company. You
may need to obtain legal advice here, but may want to point this out to the
Another problem is that the new company would not be able to
submit a return (VAT201) and make payment to SARS. The recipients also run a
risk in respect of the input tax deduction.
SARS considers that a suspicious activity would include:
1. A person or business is eligible for any type of tax but
not paying any form of tax.
4. A person or business is eligible for any type of tax,
registered for the tax, but not submitting the required returns to SARS.
Suspicious activities can be reported to SARS by;
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.
- Filling in the suspicious-activity report form
- Phoning the fraud and corruption hotline on 0800
00 28 70.