SARS VAT Invoice requirements: What Is Required?
Registering as a VAT vendor with SARS may seem daunting as it brings about new regulations that an entity needs to comply with. However, when all the legal jargon that makes up the VAT Act has been removed the requirements for VAT invoices become relatively easy to understand. Let’s look at the SARS VAT Invoice Requirements to ensure you have all the correct information on your Tax Invoices.
VAT Invoice Requirements – What SARS wants you to know
Before getting into the requirements of a VAT invoice it is important to know why adhering to these requirements is beneficial to a business. VAT registered businesses are obligated to file a VAT return (most commonly bi-monthly) with the Receiver of Revenue. VAT raised on sales invoices constitutes monies owed to SARS and often these amounts can seem excessive, especially to small to medium-sized enterprises (or SME’s). In order to reduce this amount, the VAT Act allows for the VAT portion of expenses incurred in the course of running the business to be set off against the VAT on sales invoices.
For example, a sales invoice for an amount of R100 will have 15% VAT added to it giving it a total of R115. R15 is thus the amount payable to SARS and is referred to as Output VAT. However, a business expense (such as Telephone or Internet costs) to amount of R57.50 carries a VAT portion of R7.50 (also known as Input VAT). These two amounts are deducted from each other to determine how much should be paid to SARS (R15 – R7.50 = R7.50)
The VAT Act No. 89 of 1991 as published in the Government Gazette requires that as from 8 January 2016 all VAT vendor invoice should contain the following:
- The word(s) “Invoice”, “Tax Invoice” or “VAT Invoice”
- The name, address, and VAT registration number of the supplier
- Name, address and, where the recipient is a registered vendor, the VAT registration number of the recipient;
- An individualised serial number (or invoice number) and the date on which the invoice is issued
- A description of the goods or services being supplied. If the goods being supplied are second hand it should be clearly indicated as such in the description.
- Quantity or volume of the goods or services supplied; and
- Value of the goods or services supplied, the amount of tax charged, and the consideration for the supply.
Any invoice not containing all of the above requirements may be excluded by SARS. The amount excluded will then become due and payable by the VAT vendor. The VAT Act also prescribes the timeframe within which a tax invoice must be issued (i.e. 21 days from the time the supply was made).
When the invoice issued is totaled at R5000 or less an abridged tax invoice will be acceptable. This type of invoice does not need to reflect the following:
- Details of the purchaser
- The volume being purchased.
If the supply of goods is less than R50 no tax invoice is required. But a slip or sales docket indicating the VAT is required.
SARS has put together a tax Invoice checklist for ease of reference. For further guidance on this matter visit the SARS website or Contact us If you require any assistance with accounting, bookkeeping, reporting, business advisory, or tax compliance services.
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