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 does not reflect on a tax invoice, VAT can’t be collected on it.
The VAT Act prescribes that a tax invoice must contain specific information and details about the taxable supply made by the business as well as the parties to the transaction.
Additionally, the VAT Act also specifies when a tax invoice must be issued (e.g., 21 days from the time the supply was made).
If your business is 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 and if the invoice amount is R50 or less, a tax invoice isn’t required.
The following information must reflect on a full Tax Invoice (total value exceeding R5,000) for it to be 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) .
The following information must reflect on an abridged Tax Invoice (amounts between R50 and R5,000) for it to be 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)
For further queries, connect with the SA Revenue Service via it’s online platforms.
