Follow these seven rules to issue debit notes correctly

43984, 17 Oct. 2014

Tags: sars, debit notes, rules for issuing debit notes

If you think SARS only scrutinises your tax invoices to ensure they’re valid, you’re wrong.
SARS also puts your debit notes under the microscope to ensure they’re correct and will punish you with harsh penalties if it finds you’re issuing them incorrectly.
Since punishment from SARS is the last thing you want, follow these seven rules to issue debit notes correctly.
Stick to these seven rules when you issue debit notes – it’s the only way to ensure they’re correct and valid
If you charge more Vat than you invoiced for, you must issue a debit note to the recipient.
The rules for issuing a valid debit note are as follows:
Rule 1: The debit note must have the words “debit note” in a prominent place.
Rule 2: Your name, address and Vat registration number must appear on the debt note.
Rule 3: The name, address, the Vat registration number of the recipient and where the recipient is a registered vendor must appear on the debit note.
Rule 4: You must include the date when you issued the debit note;
Rule 5: Your debit note must contain either:
  • The amount you increased the supply by and the increased tax amount; or
  • If you use the tax fraction to calculate your Vat, include either the amount Vat has increased by or a statement that the increase includes an amount of tax and the rate of the tax included.
Rule 6: Include a brief explanation of the circumstances that led to you issuing the debit note.
Rule 7: You must have enough information to identify the transaction the debit note relates to.
Following these seven rules will help you issue debit notes correctly. The end result: You’ll avoid harsh SARS penalties.

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