The South African Revenue Service (SARS) has reminded VAT-registered businesses of the importance of verifying their tax invoices before filing. A valid tax invoice is essential for input VAT claims on business expenses. According to SARS, an incomplete invoice can prevent the deduction, even if the underlying purchase was genuine. Businesses are advised to check their invoices for required details to ensure smooth processing of their claims.
SARS has specified different requirements for tax invoices based on the value of the supply. For taxable supplies costing more than R5,000, a full tax invoice must be issued. For supplies costing R5,000 or less, an abridged invoice may be used. For supplies costing R50 or less, a tax invoice is not required, but a till slip or sales docket showing the VAT charged is needed to substantiate an input-tax claim. Businesses should ensure they understand these thresholds and requirements.
To be valid, a tax invoice must bear the words ‘Tax Invoice’, ‘VAT Invoice’ or ‘Invoice’, have a serial number and issue date, identify the supplier and its VAT number, and describe the goods or services and the VAT amount. For full invoices, SARS also requires recipient details, including the recipient’s VAT number when the recipient is a vendor. Businesses should check their invoices against these requirements.
SARS emphasizes the importance of issuing invoices within 21 days from the time the supply was made. Keeping a dated copy with the related purchase record makes it easier to reconcile a claim against the business’s books. This record-keeping is crucial for businesses to ensure accurate and efficient processing of their VAT claims.
The revenue service has made it easier for businesses to comply with these requirements by providing guidance on its tax-invoice guidance page. This page sets out the full list of particulars and any later changes. Businesses are advised to consult this page to ensure they are meeting all the necessary requirements.
The practical step for businesses today is to identify any missing invoices before the next return is prepared. This check can help prevent issues with input VAT claims and ensure smooth processing of returns. By taking this step, businesses can avoid potential delays and complications.
SARS has reiterated that this is a records check, not a new tax rule. The thresholds and invoice requirements have been in place, and businesses should have been complying with them. However, the reminder is timely, and businesses should take this opportunity to review their processes and ensure they are meeting all the necessary requirements.
Key points
- SARS requires valid tax invoices for input VAT claims, with specific requirements based on the value of the supply.
- Businesses must issue invoices within 21 days from the time the supply was made and keep dated copies for record-keeping.
- SARS provides guidance on its tax-invoice guidance page, which businesses should consult to ensure compliance.
