| The purpose of this article is to empower South | | | | the period they wish to audit and reconcile your |
| Africans to be more prepared for a VAT audit, | | | | Output Vat to your financial statements. |
| know their rights when dealing with SARS and | | | | Cooperate with SARS at all times. |
| also improve their general knowledge with respect | | | | Don't be a statistic. You can save a fortune by |
| to VAT. It is often the case that SARS decides | | | | being more knowledgeable. Did you know that in |
| to do a VAT audit on a company. One of the | | | | terms of section 45 of the VAT act SARS must |
| first areas they first lock onto when visiting you is | | | | refund you within 21 business days if a refund is |
| checking up on whether Output Vat on company | | | | due to you. If they pay you late they must pay |
| car fringe benefits has been paid over. Yes! When | | | | you back with interest. Simple things like ensuring |
| an employee receives a company car as a fringe | | | | that you do not claim an input tax deduction on |
| benefit Output VAT is payable on this benefit so | | | | what SARS terms a "motor car" can really be a |
| be prepared. The next area SARS focuses on | | | | benefit to you. However you can claim a |
| when conducting an audit are VAT invoices. If | | | | deduction on single cab vehicles and delivery |
| SARS auditors find errors, you could be assessed | | | | vehicles. SARS also allows input VAT to be |
| and liable for interest and penalties. Section 20 of | | | | claimed on debit orders, bank charges, leases, |
| the VAT act requires that each tax invoice should | | | | subsistence allowances and entertainment. So |
| comply with certain criteria for example the | | | | take advantage of these options. |
| name, address and VAT registration number of | | | | In respect of entertainment there are certain |
| the supplier must be prominently displayed on an | | | | rules. VAT can be claimed on promotional gifts, |
| invoice. Remember that electronic VAT invoices | | | | flowers for reception area and medical bills for |
| are allowed provided that they comply with | | | | employees. However VAT on personal |
| certain requirements as well such as ensuring that | | | | subscriptions, staff canteen expenses, year end |
| 128 bit securtiy is in place.In order to claim an | | | | functions and staff canteens cannot be claimed. |
| input credit you need to ensure that your invoices | | | | Therefore no VAT can be claimed on office tea |
| comply with the requirements and remember that | | | | and coffee. |
| documents need to kept for a minimum period of | | | | Finally, if your business is only rendering an |
| 5 years. In the event that SARS does decide to | | | | exempt supply you do not have to register for |
| audit you ensure that you arrange with them to | | | | VAT. An exempt supply includes membership |
| perform the audit on your premises so that you | | | | fees, educational services, passenger services by |
| can save on making copies. It is wise to analyse | | | | rail or road and many others. |
| SARS queries to ensure that the queries relate to | | | | |