When it comes to managing your tax invoices correctly, you need to live by these two rules

43984, 25 Sep. 2014

Tags: sars, tax invoices,

Your tax invoices are the most important link in the Vat chain.
If you get them wrong, you won’t be able to deduct input tax on your purchases. What’s more… You’ll have to deal with endless SARS audits and penalties.
But, you can avoid all of this by managing your tax invoices correctly.
How do you do this?
Read on to discover two rules you need to follow to manage your tax invoices correctly so you can avoid SARS penalties.
Two rules for managing your tax invoices correctly
Rule #1: If you’re the supplier issuing the invoice, you must list the recipient’s Vat number on the invoice.
You don’t have to check the number is valid and correct – this is the recipient’s responsibility. He’ll double-check all the invoice requirements are met and ensure you (supplier) have Vat details in good time to incorporate them on the tax invoice.
If you issue tax invoices to anyone who isn’t a Vat vendor, you don’t need to complete anything further regarding the recipient on the tax invoice in the space you would’ve written the person’s name and address if it was a full invoice.
Rule #2: If you’re the recipient of the goods or services, you’ll forfeit your refund if you give the supplier incorrect Vat information.
It’s your responsibility to give the supplier the correct Vat registration number for the tax invoice. If your Vat number doesn’t appear on the invoice, you won’t be able to claim input tax on the purchase.
Overall, it’s good practice to contact all your regular suppliers and make sure they have all your business details on their database. It’s in your interest to help suppliers with this, or run the risk of having SARS disallowing your input tax claims.
In addition, review your invoices when you receive them for any red flags.
Following these two rules will help ensure you manage your tax invoices correctly if you’re the supplier or recipient.

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