Q: A VAT vendor
registered in August 2014 and claimed startup costs prior to registration, do
invoices for startup costs from before vendor registration have to have vendor
VAT registration number on them?
A: Section 18(4) of the VAT Act allows for pre-trade expenses to be deducted
as calculated in terms of that provision. However in our view this provision
does not override the input tax requirements in section 16(2)(a) of the VAT Act that requires any invoice to
comply with Section 20 of the VAT Act, the latter which requires the recipients
VAT number to indicated on the tax invoice. In our view the vendor should apply
to SARS in terms of section 20(7) of the VAT Act for a directive that the tax
invoices for the re trade period does not have to have the recipients VAT
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.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.