tax invoice

[murdock]

if i invoice a customer... and my invoice has the customers vat number under the customers details...but my invoice is labelled "invoice" and not "Tax" invoice and i dont put a VAT number on my invoice under my details is this legal or must i leave off the customers vat number rather?

when i invoice customers via my other company which is vat registered...i have both my vat number and the customers vat number at the top of the invoice in seperate blocks.

[geraldenek]

if i invoice a customer... and my invoice has the customers vat number under the customers details...but my invoice is labelled "invoice" and not "Tax" invoice and i dont put a VAT number on my invoice under my details is this legal or must i leave off the customers vat number rather?

I take you are not vat registered for this company? If that is the case:

You may issue a tax invoice without the VAT number. (If you think of pastel - lots of people use it that are not registered for VAT and still the invoice states Tax Invoice)
The space on the tax invoice where the customer’s VAT number would otherwise be completed may be left blank, or the words “non-vendor” may be inserted.


THE DIFFERENCE BETWEEN AN INVOICE AND A TAX INVOICE (just for insterest sake)

An invoice is a document notifying the purchaser of an obligation to make payment in respect of a transaction (not necessarily a taxable supply). The issuing of an invoice is one of the events which may trigger the time of supply for a transaction, which, if it is a taxable supply, will normally mean that there would be an obligation to declare output tax. Conversely, the fact that you may have an invoice from the supplier does not mean that you will be entitled to claim input tax thereon.

On the other hand, a tax invoice is a document which is provided for in the Value-Added Tax Act, 1991 (“the VAT Act”) to enable the vendor to claim input tax. It will therefore always relate to a taxable supply (whether wholly or partially). The VAT Act prescribes that a tax invoice must contain certain details about the taxable supply as well as the parties to the transaction.

[murdock]

thanks...

i will remove the customers vat number and insert VAT : "non vender" under my details...so there is no confusion.

in fact i will do this with all the customer invoices for the company which is not registered.

[murdock]

another question...

is it legal to be a sole prop VAT registered and own a cc which is not VAT registered

the one company offers a service with materials (vat registered) and the other only a service and no materials are required (non vender)...but they are in the same industry.

[geraldenek]

this is absolutely acceptable, expect if the non vat vendor's turnover exceed R1,000,000.00.

It's the same principle as people having commerical property in their own name and are vat registered and also have a cc with commerical property which is not vat registered.

why do you choose to do it like this though?

[murdock]

i wish... or do i...more money more problems.

the sole prop does work which involves purchasing goods which we supply and install.

the cc supplies a labour only service...more of of a specialised field...of the what the sole prop company does...but there is no goods provided.

[geraldenek]

so true.....

[bammer]

A tax invoice can only be issued by a registered VAT vendor (s.20(1)).

A tax invoice has to be issued within 21 days of making a taxable supply.

A tax invoice has to comply with the requirements of section 20(4) (e.g. recipient and supplier's names, addresses and VAT numbers).

S. 58(n) provides that you are guilty of an offence when issuing a document bearing the words "tax invoice", if that document does not meet the requirements of, inter alia, section 20(4).Therefore, should you be convicted, you will be liable to a fine or to imprisonment for a max period of 2 years - however, this rarely happens.

[geraldenek]

A tax invoice can only be issued by a registered VAT vendor (s.20(1)).

Hi bammer i dont agree with your statement.

Section 20(1) states: "Except as otherwise provided in this section, a supplier, being a registered vendor, making a taxable supply (other than a supply contemplated in section 8(10)) to a recipient, must within 21 days of the date of that supply issue a tax invoice containing such particulars as are specified in this section: Provided that-
i) it shall not be lawful to issue more than one tax invoice for each taxable supply;
ii) if a vendor claims to have lost the original tax invoice, the supplier or the recipient, as the case may be, may provide a copy clearly marked "copy"."




According to the VAT 404 guide on SARS website :


An invoice is a document notifying the purchaser of an obligation to make payment in respect of a transaction (not necessarily a taxable supply). The issuing of an invoice is one of the events which may trigger the time of supply for a transaction, which, if it is a taxable supply, will normally mean that there would be an obligation to declare output tax. Conversely, the fact that you may have an invoice from the supplier, does not mean that you will be entitled to deduct input tax thereon.

On the other hand, a tax invoice is a document which is provided for in the VAT Act to enable the vendor to deduct input tax. It will therefore always relate to a taxable supply (whether wholly or partially). The VAT Act prescribes that a tax invoice must contain certain details about the taxable supply as well as the parties to the transaction. Refer to paragraph 11.2 below for details.

In practice, some vendors combine the function of the two documents to avoid administrative duplications. However, vendors who prefer this method should ensure that their invoices comply with the requirements of a tax invoice, otherwise their customers will not be allowed to deduct the VAT charged as input tax.

[Dave A]

A tax invoice can only be issued by a registered VAT vendor (s.20(1)).

If true, it poses something of a problem for vendors/suppliers not registered for VAT, because there's a heck of a lot of companies that refuse to pay without being supplied a Tax Invoice - and will happily pay once those magic words are on the invoice, even although they clearly reflect that the vendor is not registered and there is no claimable input VAT to be had.



Happily for me it's academic - but for a lot of micro enterprises this could be a very real headache

[JeanPop]

If true, it poses something of a problem for vendors/suppliers not registered for VAT, because there's a heck of a lot of companies that refuse to pay without being supplied a Tax Invoice - and will happily pay once those magic words are on the invoice, even although they clearly reflect that the vendor is not registered and there is no claimable input VAT to be had.



Happily for me it's academic - but for a lot of micro enterprises this could be a very real headache

Quick question on this one - can a vat vendor then claim vat output from a non vat vendor?

[BusFact]

Quick question on this one - can a vat vendor then claim vat output from a non vat vendor?

You cannot claim any VAT from a non VAT vendor. If he is your supplier you cannot claim input VAT off his invoices because there is no VAT reflected on them (well, there should not be).