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