Where a vendor is liable for VAT a month before obtaining a VAT number from SARS
12 January 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: A customer of
mine registered his company for VAT during October 2014. Apparently SARS
approved his VAT registration in December, but stating that he is liable for
VAT from 1 November 2014. He has already invoiced his customers in November
with no VAT. Should he now re-invoice?
How do I calculate his VAT return?
Value-Added Tax Act or SARS guides don’t deal with the issue raised.
We don’t know if the application to be registered was made
under section 23(1)(a) (more than R1 million) or not. Our guidance will therefore be general in
nature – all references to sections are to sections in the Value-Added Tax Act.
The effective date of registration
depends on this. See also section
In terms of the legislation a person (company) can only
issue a tax invoice if it is a registered vendor. Section 7 also refers to the supply by a
vendor. Of course a vendor includes a
person who is required to be registered, but we don’t know if that is the
case. That then means that the person
(you refer to a customer) not registered as a vendor can’t levy output tax. We don’t know if the person requested an
earlier effective date. If so we suggest you escalate the matter to a senior
SARS official to obtain a registration number.
We submit that the best course of action would be to ask
SARS for an opinion of how to treat this if they backdated the effective
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