SARS states on its website: “Without a proper tax invoice a business cannot deduct input tax on business expenses.”
This is a simple yet important statement. Simple, because if all your VAT input claims are supported by valid source documents AND filed for easy access during a SARS VAT Audit, then it will avoid the important non-compliance implication of SARS levying Fines and Penalties AND it will also avoid the amount of precious business time wasted trying to correct the non-compliance.
VAT Input is a deduction that registered VAT vendors (businesses) are allowed to make against the VAT Output they need to pay to SARS on their vatable supplies (sales) made.
In order for a tax invoice to be valid in terms of the VAT Act, it must have certain details reflected on the document as set out in section 20(4) and (5) of the VAT Act. From 6 January 2018, SARS categorises 3 types of documents and their criteria based on the threshold amount including VAT that are allowed for a VAT Input deduction:
AstraFin would be able to assist you to install and maintain a business process to keep track of your valid Tax Invoices and / or review your current VAT compliance. Please contact us to arrange a suitable time.