Blog

What is a valid tax invoice?

Tax Invoice

Tax Invoice

Have you ever considered if your invoices are valid? Or are the invoices that you receive from your suppliers valid?

The first questions that would jump into your head would be: “Why should I care?

Here is why:

If you are being audited by SARS and you cannot supply a valid invoice, the input tax credit will be refused for VAT purposes, but there are more, the expense can also be disallowed in the end of the year from your tax computation. This means that you will have to pay extra tax on a valid business expense, just because the invoice did not meet the requirements set out by SARS.

What is required on the invoice?

  • The invoice must have the words “Tax Invoice” on it.
  • You need the name, the address and the VAT number of the supplier.
  • You need the name, the address and the VAT number of your business.
  • The date the invoice was issued.
  • An invoice number that serialized (e.g. numerical number that follow on the next).
  • A description of the goods purchased, including the volume or quantity.
  • The value of the supply, the amount of tax charged and the total charged for the products

How long should you keep the invoices? 

5 years from the date of submitting your tax return

Bright future for new business owners

 

New Business owners

Bright future for new business owners

Looking back over the past 10 years one can clearly see that the South African business environment is evolving into a simplified and more efficient information technology based system.

Several of our government departments have adapted simplified policies and procedures of which the following were the most significant:

  • The implementation of the Companies Act, 71 of 2008.
  • Automation of the Companies and Intellectual Property Commission (CIPC), formerly known as the Companies and Intellectual Property Registration Office (CIPRO).
  • Improvements on the functionality of SARS E-Filling.
  • Implementation of single tax registration.

The Companies Act, 71 of 2008

The new companies act phased out the registration of new Close Corporations, which was the preferred business entity for new business owners due to the easy registration procedure and less stringent compliance requirements, but it didn’t leave the new business owner without a alternative. The regulations in the new Act were simplified to accommodate Small and Medium business enterprises (SME’s) who cannot afford to comply with some of the stringent requirements of the old Act.

Some of the key changes in the companies act:

Old Act New Act
Company formation It was compulsory to reserve a name for the companyThe following documents had to be prepared and submitted:

  • Memorandum of association
  • Articles of association

 

Complex administrative process for incorporation and registration

Name reservations are optional. A company may elect to be registered with its registration number as a nameThe following documents need to be prepared and submitted:

  • Memorandum of incorporation (MOI)

 

Simplified registration process

Audit of financial statements – Companies All companies must be audited. The following companies MUST be audited:

  • Public companies
  • State owned companies
  • Private companies, Personal liability companies and non-profit companies when it is in the public’s best interest.

 

All companies that are not audited must be independently reviewed with the exception of companies where all the shareholders are also directors (Owner managed companies).

Audit of financial statements – Close Corporations Close Corporations had no obligation to be audited but may voluntarily choose to be audited. Close Corporations that have a large public interest are obligated to have their financial statements audited.Close Corporations with a low public interest score are not obligated to have their financial statements audited but may voluntarily choose to be audited.
Registers to maintain Requirement to keep:

  • Register of members
  • Register of directors
  • Register of auditors
  • Register of interest in contracts of directors and officers
  • Register of pledges, cessions and bonds
  • Register of debenture-holders
Requirement to keep:

  • Register of directors
  • Register of auditors
  • Register of company secretaries
  • Certificated and certificated securities register

 

System automation at CIPC

The Companies Act 2008 simplified the registration requirements for new private company registration to such an extent that the Companies and Intellectual Property Commission (CIPC) developed an online tool for the registration of private companies. The CIPC went through a rough patch in  2012 when their IT systems could not keep up with the mass of transactions but it was taken care off and the CIPC’s systems are fully functional.

Further developments from the CIPC were :

  • The implementation of a fax to email service
  • Electronic submission of most company forms
  • Automation of procedure for director changes

Implementation of single tax registration

SARS announced the implementation of single registrations on 12 May 2014. This entails that taxpayers will no longer be obligated to stand in the long queue at SARS branches to get their companies registered for Income tax, PAYE and VAT. For more information on Single tax registration please refer to posts on our Facebook page or the SARS website.

Improvements on the functionality of SARS E-Filling.

SARS continually strive to be technology innovative. They have made significant improvement in their operational procedures with the implementation and development of:

  • The efilling system
  • Easyfile Employers and
  • Easyfile Dividends

The development of e-filling enables taxpayers to:

  • Register for a variety of taxes through the single registration portal
  • Register your companies employees for income tax quickly and efficiently
  • Submit your company’s tax returns
  • Submit your company’s employer reconciliations and employee tax certificates.

Apart from the significant technological improvements the cost of starting your business have also decreased significantly. With the implementation of the single registration from SARS one can only anticipate that the costs for tax registrations will also decrease considerably over the next 3 – 6 months.

We are committed to adopt the new changes first, therefore bringing you the cost savings first.

Written by: Henry Coetzee

Accounting Central at charity fundraiser for disabled children

Accounting Central, Polokwane

Accounting Central at Charity Golf Day – Polokwane

Accounting Central, together with Momentum sponsored the 1st hole of the Arende class charity fundraiser golf day, held at the Polokwane Golf Club, Thursday, the 8th of May 2014.

Deon Colyn, director of Accounting Central attended the day, his experiences was as follows:  “It is great to see the businesses of Polokwane come together to support the children of our community. It was a fun filled day, with a good purpose. I always feel good when I can help someone.”

Arende class provides a place where children with autism, Down’s syndrome, loss of sight and hearing can attend school. Currently there are between 16 to 20 learners, which under normal circumstances would not be able to attend school. The children are hosted at a private establishment and does not receive funds from the government.

What do I need to issue a BEE Certificate?

BEE Certificate

Bee Certificate

We have an automated process which is compliant with the relevant acts, in this process it will require you to upload you documents and company details to ensure everything is done correctly. With this information we will automatically generate the documents you are required to sign and upload to the system.

The first step would be to register on our site ( http://www.bqsystems.co.za/Register.aspx?site=DG7 ) and then to upload the necessary documents:

  • Proof of payment
  • Proof of tax registration
  • CM1 or CoR14.1 Certificate of registration
  • CM9 Certificate of name change (if applicable)
  • Proof of turnover
  • Proof of black ownership
  • Share register of the company
  • Share certificates of the company
  • Shareholders agreements of the company
  • Memorandum of Incorporation

We will need the following business information:

  • Business Name
  • Business Type
  • Annual Turnover (excl VAT)
  • Organisation Registration Number
  • Black Ownership(%)
  • VAT Number (optional)
  • Black Female Ownership(%)
  • Physical Address
  • Postal Address
  • Business Sector
  • Total Annual Revenue
  • Net Profit before Tax
  • Total Labour Costs

We will need the following contact details of a person in the company that is allowed to sign official documents:

  • Name and Surname
  • Position in Business
  • Email Address
  • Phone Number

This is what you will require for an EME (Exempt Micro Enterprise)

If you need more information you can contact me at jaco@accountingcentral.co.za