If you’re relatively new to running a business or charging customers, you might be wondering what information to include in your invoices. The South African Revenue Service (SARS) has several requirements for tax invoices – and including all the necessary information is essential to making sure they’re compliant.
In this article we share the a quick guide on what you need to include.
What is a tax compliant invoice?
In South Africa, a tax compliant invoice is an invoice that contains all the necessary information to comply with the Value Added Tax (VAT) Act. If any of the required information is left off a tax invoice, VAT can’t be collected on it.
When do I need to create a tax invoice?
If you’re registered for VAT and the invoice amount is over R5,000, you’ll need to create a full tax invoice.
For amounts between R50 and R5,000, you can use an abridged tax invoice.
If the invoice amount is R50 or less, a tax invoice isn’t required.
What is required on an invoice for it to be tax compliant?
The following information needs to include on a full tax invoice (amounts over R5,000) for it to be considered valid:
· The words “Tax Invoice”, “VAT Invoice” or “Invoice”
· Name, address and VAT registration number for your business
· 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)
The following information needs to be included on an abridged tax invoice (amounts between R50 and R5,000) for it to be considered valid:
· The words “Tax Invoice”, “VAT Invoice” or “Invoice”
· Name, address and VAT registration number for your business
· Serial number and date of issue of invoice
· Accurate description of goods and /or services
· Value of the supply, the amount of tax charged and the consideration of the supply
(value and the tax)
Do I need to collect VAT on my invoices?
You must register for VAT and collect it on your invoices if your annual turnover exceeds or is likely to exceed R1 million.
You can also choose to register for VAT voluntarily if your turnover in the past 12-month period has exceeded R50,000. However, if your business is registered for turnover tax you don’t need to charge VAT on your invoices.
Can invoice software help with tax compliant invoices?
Invoice software is one of the best ways to ensure your invoices are tax compliant every time. It also speeds up and automates a lot of the processes around billing.
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