VAT Invoices
SARS is clamping down on non-compliant tax invoices and the onus is on the VAT vendor to ensure that all tax invoices meet the requirements of a full tax invoice in terms of Section 20(4) of the VAT Act before submitting a VAT return.
Failure to do so will result in harsh penalties if the VAT return is selected for review and it is found that the supporting documents are non-compliant.
Follow the guidelines below for valid tax invoices
Criteria for full tax invoice:
(This is required where the supply, including VAT exceeds R5000).
- 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 VAT Vendor the recipient’s VAT registration number.
- Invoice number and date of issue of the invoice.
- An accurate description of goods and/or services (indicating where applicable that the goods are second hand).
- Quantity or volume of goods or services supplied; and
- Value of the supply, the amount of tax charged and the consideration of the supply.
Please note that all seven criteria must be met for an invoice to be regarded as a tax invoice.
Criteria for abridged tax invoice:
(When the supply of goods/ services is less than R5000 the vendor can issue an abridged tax invoice.)
- Contains the words “Tax Invoice”, “VAT Invoice” or “Invoice”.
- Name, address, and VAT registration number of the supplier.
- Invoice number and date of issue of the invoice.
- An accurate description of goods and/or services (indicating where the applicable goods are second hand); and
- Value of the supply, the amount of tax charged and the consideration of the supply.
Please note that all five criteria must be met for the invoice to meet the requirements of an abridged Tax Invoice.
If valid tax invoices cannot be provided during VAT audit, the vendor may lose up to 100% of the input tax being claimed on the invoice. Penalties, interest, and other consequences may be imposed on the vendor.