Do you make these two common errors on your company’s tax invoices?

Simangele Mzizi, Fsp Business, 11 Sep. 2014

Tags: input tax, tax invoices, tax invoice errors, tax invoices and input tax, sars

A tax invoice is a special document that the Vat Act requires. You need it to claim any input tax credits in your Vat return for taxable supplies you receive.

While Vat vendors know that tax invoices are the most important link in the Vat chain, they continue to make errors when it comes to tax invoices. As a result, SARS slaps them with severe penalties and rejects their input tax claims.

Keep reading to discover the two common errors vendors make on their tax invoices so you can avoid falling into the same trap.

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Are you making these two tax invoice errors?

Error #1: You lose a tax invoice and you ask the supplier to issue another tax invoice for the same purchase.

If you lose a tax invoice, you CAN’T ask the supplier to issue another tax invoice for the same purchase.

But, you can ask your supplier to issue you with a copy of the tax invoice. Just make sure they clearly mark it with the word “copy” after copying it.

Bear in mind that SARS will only accept a tax invoice copy if your supplier prints it on a plain paper and the quality is still good.

To avoid the trouble of having to ask for a copy of a tax invoice, file invoices immediately to ensure they don’t get lost or misfiled, as you can’t make an input tax claim without them.

Error #2: You find out your supplier forgot to include your Vat number on the tax invoice and you do nothing about this.

The Practical Vat Loose Leaf Service says that if your supplier’s forgotten to include your Vat number on the tax invoice, return the invoice to him so he can correct it.

If he can’t correct the tax invoice, he must cancel it by issuing a credit note and make out a new tax invoice with all the correct details.
The same applies for an incorrect credit or debit note.

Now that you know about these two common tax invoice errors, avoid them at all costs. And remember, the most important link in the Vat chain is the tax invoice, get it wrong, and you won’t be able to deduct input tax on your purchases.

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