On 30 September 2024, SARS passed the Binding General Ruling (VAT) 27 (Issue 2). It outlines a binding general ruling regarding the Value-Added Tax (VAT) Act, specifically addressing when vendors are not required to issue tax invoices, credit notes, or debit notes.
South Africa: Exemptions from Tax Invoice Requirements under Sections 20(7) and 21(5) of Ruling 27
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Author: Ivana Picajkić
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Fiscal subject related
General information
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Content accuracy validation date:
19.11.2024
Content accuracy validation time:
08:14h
The VAT Act outlines specific requirements for tax invoices, credit notes, and debit notes. However, the Commissioner can approve exceptions in certain situations where compliance is difficult. According to section 20(7), the Commissioner may allow some details to be excluded from tax invoices or provided differently, and under section 21(5), similar flexibility applies to credit and debit notes. The Commissioner must ensure that sufficient records exist to verify the details of a supply and that issuing a full invoice or note would be impractical. This ruling allows for simplified invoicing processes in specific industries while maintaining necessary record-keeping for tax purposes.
The Commissioner will exempt vendors from issuing full invoices for transactions like installment agreements, rentals, royalties, and short-term insurance (provided that it is impractical to require a full tax invoice), provided that sufficient records exist to identify the supplies.
If a full invoice is not issued, the contract must include key details such as the names and VAT numbers of the parties involved, a description of goods or services, and a statement indicating VAT is applicable.
Descriptions of goods/services and quantities can be documented separately if referenced in the invoice and available upon request.
This ruling is effective from October 1, 2024, until further notice, with specific requirements for agreements made after January 1, 2025.
Overall, the ruling aims to simplify compliance for vendors while ensuring adequate record-keeping for tax purposes.
Here is the Ruling:
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