The attached document issued by SARS covers a number of topics that VAT Vendors need to take note of. Contact us if you are uncertain about any of these items or if we can be of any assistance.

 

 The following are covered in the attached document (pdf) VAT – some important matters Read more of the topics listed below in this document.

 

Second Hand Goods

Although the general rule is that a vendor must have a tax invoice before being allowed to claim any input tax in relation to the supply, there are a few exceptions to the rule.

 

Repossession of goods

Where goods supplied under an instalment credit agreement are repossessed, it is impractical to require the person from whom the goods were repossessed (i.e. the debtor) to issue an invoice or tax invoice to the financier, therefore:

 

Electronic Tax Invoices

VAT NEWS 20 sets out the requirements for vendors who wish to issue tax invoices, debit notes and credit notes in electronic format instead of the traditional paper version (hard copy).

 

Lost or misplaced tax invoices

If a tax invoice in respect of a particular supply is lost, you may not request the supplier to issue another tax invoice as it is an offence to issue more than one tax invoice per taxable supply.

 

Alternatives to tax invoices

The VAT Act does provide that in certain instances, it may be acceptable to deviate from the normal requirements of a tax invoice, debit or credit note as provided for in the VAT Act where the Commissioner is satisfied with alternative documentation which will serve as the tax invoice for input tax purposes. These requirements are contained in sections 20(7) and 21(5) of the VAT Act.

 

Tax invoices for mixed supplies

Where the supply is a zero-rated supply, a full tax invoice must be issued. Where the supply is exempt from VAT, no tax invoice may be issued and since no tax is charged, no input tax may be claimed in respect thereof. There may, however, be a situation where various supplies are made by the same supplier and where each supply is treated differently for VAT purposes (for example, in the tourism industry). Where this occurs, the tax invoice must clearly distinguish between the various supplies and indicate separately the applicable values, and the tax charged (if any) on each supply.

 

Tax Invoice prepared by recipient

In some instances the consideration for a supply is determined by the recipient of the goods/services rather than by the supplier. An example of this is where a farmer (the supplier) takes produce to a co-operative which will only be sold at a later stage, once the quality and quantity of the produce has been determined. Since the price that will eventually be obtained for the goods depends on factors outside the farmer’s control (and often the co-operative merely acts as agent for the supplier), the farmer is not in a position to issue an invoice or tax invoice for the produce when it is delivered for sale. In such cases, SARS may permit the co-operative (recipient) to issue the tax invoice for the supply. This is referred to as recipient–created invoicing (or self-invoicing).

 

Agents & Auctioneers

As an agent merely acts on behalf of the principal, the VAT on the transactions concerned (e.g. local sales/purchases, exports, importations, etc.) must be accounted for by the principal and not the agent. Strictly speaking, any tax invoice, credit or debit note or bill of entry (or other document prescribed by Customs and Excise) relating to a supply by the agent on the principal’s behalf should contain the principal’s particulars.