Don’t make these five invoicing mistakes or SARS will disallow your input tax deduction

Simangele Mzizi, Fsp Business, 01 Oct. 2014

Tags: invoicing mistakes, tax invoices, sars

If you think getting a tax invoice wrong is harmless, you’re wrong.

SARS will not only penalise you for the error on your tax invoice, but, it’ll disallow your input tax deduction.

That cash injection you were hoping to get through the deduction will go out the window, instead, you’ll be the one forking out cash in the form of penalties.

Don’t take that risk.

Never make these five invoicing mistakes if you don’t want SARS to disallow your input tax deduction.

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Five things you must never get wrong with your invoicing

#1: Don’t issue standard rated invoices in foreign currency instead of in rand.

This is wrong because exchange rates fluctuate. So the Vat might be higher on the invoice when the currency changes. This puts you in a situation where you’re out of pocket, so avoid this mistake.

#2: You must include the recipient’s Vat number.

#3: Don’t incorrectly label the document as “Vat invoice” instead of “Tax invoice”. SARS will disallow any input tax you claim on a document called “Vat invoice”.

#4: Don’t put an incorrect trading name of the recipient on the invoice. SARS may disallow the input tax deduction if the invoice is made out to someone else (and it’s not in terms of the agent/principal relationship).

#5: Don’t forget to mark a copy of a tax invoice as a “copy”.

If you forget, SARS will think you’ve issued more than one original tax invoice and it will penalise you as the supplier.

Here’s a useful tip to apply when it comes to invoicing

The Practical Vat Loose Leaf Service says, if you get tax invoices with errors, get your suppliers to credit the incorrect invoices you have and re-issue proper tax invoices. If you’re the one who made mistakes, credit the incorrect invoices and re-issue proper tax invoices. If you don’t, SARS will penalise you for these mistakes.

Now that you know about these invoicing mistakes, stay away from them so SARS won’t disallow your input tax deduction.

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