Is your business VAT compliant?
05 June 2017
Posted by: Ernest Roper
Before claiming input VAT it is critical that the supplier invoice complies with the Value-Added Tax (VAT) Act. Should a vendor claim the VAT, and SARS conduct an audit the VAT claimed will be reversed and the vendor will be responsible for the amounts incorrectly claimed.
Additional penalties may also be imposed.
As from 8 January 2016, the following information must be reflected on a tax invoice for it to be considered valid:
- Contains the words “Tax Invoice”, “VAT Invoice” or “Invoice”
- Name, address and VAT registration number of the supplier
- Name, address and where the recipient is a vendor, the recipient’s VAT registration number
- Serial number and date of issue of invoice
- Accurate description of goods and /or services (indicating where applicable that the goods are second hand goods)
- Quantity or volume of goods or services supplied
- Value of the supply, the amount of tax charged and the consideration of the supply (value and the tax)
Further, when advertising the price of a product, businesses must be mindful of the provisions of the VAT Act.
Businesses should note that the practice of only reflecting a price excluding VAT on an advertisement does not comply with the requirements of Section 65 of the Act and that it is not permissible to quote the price excluding VAT and have a statement that VAT has been excluded.
In light of the above authority, the mere inclusion of a statement to the effect that “prices exclude VAT” is not compliant with the provisions of the VAT Act, which in turn means that such advertising contravenes the Code.
Should you require any further information please contact your tax advisor for detailed advice or visit the SARS website http://www.sars.gov.za/ClientSegments/Businesses/Government/Pages/Tax-Invoices.aspx
Aneesa Khan | Finance Manager