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Revealed: Tax invoice duties all suppliers and recipients must follow

Wednesday, 29 January 2014   (0 Comments)
Posted by: Author: FSP Business
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Author: FSP Business

You must manage your tax invoices correctly if you're a supplier or a recipient. How do you go about doing this? Read on to find out what your duties are when it comes to tax invoices so that you don't land in trouble with the taxman.

Warning: All tax invoices, both received and issued, have to comply with the requirements of the VAT Act if they're for a value greater than R5 000.

That means, you have a responsibility to do this correctly.

Let's take a closer look at what you must do if you're a supplier or a recipient.

Here's how to manage your tax invoices correctly if you're the supplier

If you're the supplier issuing the invoice, you must list the recipient's VAT number on the invoice.

You don't have to check the number is valid and correct – this is the recipient's responsibility. He'll double-check that he's met all the invoice requirements and will ensure he's given you the VAT details in good time to incorporate them on the tax invoice.

'If you issue tax invoices to anyone who's not registered for VAT, you don't need to complete anything further, regarding the recipient, on the tax invoice in the space you would have written the person's name and address if it was a full invoice,' says the Practical Vat Loose Leaf Service.

Here's how to manage your tax invoices correctly if you're the recipient

If you're the recipient of the goods or services, you'll forfeit your refund if the VAT information you've given the supplier is incorrect.

It's your responsibility to give the supplier the correct VAT registration number to be included on the tax invoice. If your VAT number doesn't appear on the invoice, you won't be able to claim input tax on the purchase.

Here's a useful tip for your regarding tax invoices

Contact all your regular suppliers and make sure they have all your business details on their database. It's in your interests to help suppliers with this, or run the risk of having your input tax claims disallowed.

Also ensure that when you have first contact with a new supplier, you give them written confirmation of all your company details and contact them later to confirm they have it, and don't require anything else.

Review your invoices when you receive them for any red flags and follow it up. Don't just forget about them once they're paid.

If you issue a defective tax invoice, or fail to issue one within 21 days of making a supply, you could face two years in jail or face a fine for R80 000. Don't take that risk. Make sure you stick to your duties regarding tax invoices! 

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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.

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