TIPS FOR SMOOTH VAT AUDITS

With the ever-increasing pressure of the fiscus, and the ever-growing shortfall of the yearly budget, it is getting extremely difficult to get the correct information through to SARS and vice versa.

In current years, the feeling is that SARS has shifted all responsibilities and admin to the tax payer. The burden of proof for the taxpayer has grown immensely. VAT especially is one of these.

The audit of VAT returns has increased tenfold. The requirements are strict as well. If invoices are not 100% correct, they get rejected. In some cases, SARS doesn’t even look further and rejects all input VAT claimed.

From personal experience, the process to rectify this is cumbersome and timely. So, to avoid unnecessary complications with VAT audits, here are a couple of tips and requirements from SARS:

There are certain criteria that tax invoices should adhere to:

Abridged Tax Invoice

(where the supply (including VAT) is greater than R50 and less than R500)

  • Contains the words “Tax Invoice”, “VAT Invoice” or “Invoice”
  • Name, address and VAT registration number of suppliers
  • 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)

All the above criteria must be met to meet the requirements of an abridged Tax Invoice.

Full Tax Invoice

(this is required where a supply (including VAT) exceeds R5 000)

  • Contains the words “Tax Invoice”, “VAT Invoice” or “Invoice”
  • Name, address and VAT registration number of suppliers
  • 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)
All the above criteria must be met to meet the requirements of a Tax Invoice.

To ease the audit processes for SARS, index and match all payments against invoices. Ensure that there is a paper trail for all VAT inputs.

There are no guarantees that the VAT audit will run smoothly, even with the above requirements adhered to. In some cases, SARS will pursue outstanding VAT accounts, and in rare cases deduct the money from a tax payer’s account. However, SARS are not allowed to overdraw on your bank account.

The abovementioned information was sourced from the SARS website www.sars.gov.za. Please contact us with any assistance with your VAT audits and queries.

Michael Ferreira


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)
CMV Group of Companies

Tel : 012 991 4400
Fax : 012 991 3001
Physical: 17 Midas Avenue, Olympus, Pretoria, 0081
E-mail: info@cmv.co.za

Copyright © Website | Powered by SucceedGroup