VAT Compliance

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A2_bA vendor is required to submit VAT returns and make payments of any VAT due (or claim a VAT refund) in accordance with the tax period allocated to the vendor (bi-monthly, monthly, six monthly or annually). The VAT returns and payments should be submitted on or before the last working day after the end of the tax period if electronic and by the 25th if manual.

Late payments of VAT will attract a penalty of 10% and interest will accrue until the debt is paid in full.

VAT Audit/ verification

When a VAT return has been chosen for verification or audit, the following documents need to be uploaded via e-filing:

  • Tax Box report or workings used to complete the return.
  • Five of the highest sales invoices
  • Five of the highest purchase invoices

On receipt of the documentation, the turnaround time for the verification to be completed is 30 working days. Should additional information be requested or insufficient documentation be supplied on the first upload then another 30 working days for completion will be added to the turnaround time. Any refunds due to a vendor will only be paid out once the verification/ audit has been completed and accepted by SARS.

On request of documents for audit/ verification, SARS affords the taxpayer 21 days to submit the documentation. If no documents are submitted within that period, another request will be sent by SARS. If the documents are still not submitted, SARS may disallow the input tax claimed on that return and charge an additional penalty for non-submission of documents. The vendor will not be able to dispute this and will have to claim the input tax disallowed in the next VAT return to be submitted. To prevent the burden of administration and added penalties and interest, it is very important that the rules above are complied with.

Tax invoices

As from 8 January 2016, the following information must be reflected on a tax invoice for it to be considered valid:

  • Contains the words “Tax Invoice”, “VAT Invoice” or “Invoice”
  • Name, address and VAT registration number of the supplier
  • Name, address and where the recipient is a vendor, the recipient’s VAT registration number
  • Serial number and date of issue of invoice
  • Accurate description of goods and /or services (indicating where applicable that the goods are second hand goods)
  • Quantity or volume of goods or services supplied
  • Value of the supply, the amount of tax charged and the consideration of the supply (value and the tax)

Author: Reona Williams HDip Tax | Tax Department Manager

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)