There’s nothing more discouraging than receiving an additional assessment on a VAT refund submitted to SARS.
It’s even more heart-breaking when the assessment was issued due to invalid supporting documentation submitted to SARS.
This could be as trivial as small detail missing on a tax invoice. Unfortunately, that petty detail becomes very important when it comes to receiving your VAT refunds. In this blog post, we look into SARS invoice requirements and how to get it right the first time.
TAX INVOICES: THE ULTIMATE HERO OF OUR VAT SYSTEM
In our South African VAT system, SARS allows businesses to deduct input VAT (on business expenses) from the output VAT on supplies made by the business. Without a valid tax invoice a business cannot deduct input tax on business expenses. A valid tax invoice should meet all SARS invoice requirements.
It’s therefore vital that your suppliers provide you with valid tax invoices. When opening an account with a regular supplier, make sure that all your company’s details are correctly captured. More importantly, let them know should any of your details change.
The flip side is also true when it comes to issuing valid tax invoices to your own customers. Not only is it required by SARS, but it’s part of delivering a good service. Sometimes, the basic required details are lost among the magnitude of additional details and beautiful logos reflected on our invoices. Make sure you cover the basic SARS invoice requirements first.
CHECK YOURSELF: DO YOU MEET SARS INVOICE REQUIREMENTS?
SARS created a very useful tax invoice checklist which you can download from their website. Note that SARS loosens the reigns on invoices of R5,000 and below.
SARS also created practical examples of valid tax invoices. This will help you check your supplier’s invoices, as well as your own company’s invoices, against SARS invoice requirements. You can click on the image below to download a PDF copy:
A valid tax invoice could make the difference in a refund paying out in a few days, or in a few months. Good news is that you can play a part in speeding up the process. Check your invoices, make the necessary changes and enjoy smooth sailing through every next VAT review that might be coming your way.