Vendors watch out! Emphasis will be placed on VAT submissions made to SARS.
Tax Practitioners and Taxpayers should ensure focus on VAT invoice compliance.
During the recent Gauteng North regional meeting held on 16 February 2023, SARS regional representatives raised concerns regarding the high percentage of inaccurate VAT declarations made by tax practitioners and taxpayers. In the Gauteng North Region there are on average 38% inaccurate VAT returns submitted to SARS.
The breakdown in terms of reasons was not disclosed at the regional meeting however the Gauteng North Regional Representative committed to having those reasons ready for the next regional meeting. This means there will be scrutiny on this area of compliance and vendors best ensure they are on the right side of the law.
Incorrect VAT returns are usually adjusted by SARS via an additional VAT Assessment. In many instances an additional VAT assessment wouldn’t contain the reasons why certain items were disallowed and this makes the process of identifying the problem and fixing it, that much harder. In these cases tax practitioners have to re-audit the entire process to isolate the problem. If this is not possible then the taxpayer or tax practitioner would have to submit a request for reasons in order to prepare the grounds for their objection to the additional assessment. These processes drag on for a long time, most supporting documents cases are late even though SARS is allowed 21 Business days to respond and then objections can take 60 business days or more.
Delays in VAT Refunds have a massive impact on Small Businesses and thus it is critical taxpayers ensure they are compliant, if not compliant you risk not receiving your refunds.
The obvious solution is to ensure you work together with your tax practitioner to ensure you maintain compliance with the VAT Act or you could soon be in for a surprise.
What is a Valid VAT/Tax Invoice?
As from 8 January 2016, the following information must be reflected on a tax invoice for it to be considered valid:
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Contains the words “Tax Invoice”, “VAT Invoice” or “Invoice”;
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Name, address and VAT registration number of the supplier;
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Name, address and where the recipient is a vendor, the recipient’s VAT registration number;
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Serial number and date of issue of invoice;
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Accurate description of goods and /or services (indicating where applicable that the goods are second hand goods);
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Quantity or volume of goods or services supplied;
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Value of the supply, the amount of tax charged and the consideration of the supply (value and the tax).
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