JOHANNESBURG - To err is human and mistakes are sometimes made on tax invoices. National Treasury has thus deemed it necessary to amend Section 20 of the VAT Act, which sets out the requirements for issuing tax invoices. The draft Administration Laws Amendment Bill of 2018 proposes the inclusion of a new section - 20(1B) - dealing with errors to tax invoices.

Generally, a tax invoice must be issued within 21 days of the date of supply and contain particulars such as:

* The words “tax invoice”, “VAT invoice” or “invoice”;

* The name, address and VAT registration number of the supplier;

* The name, address and the VAT registration number of the recipient (if registered);

* An individual serialised number and the date of issue;

* A full description of the goods;

* The quantity or volume of the goods or services supplied; and

* The value of the supply, the tax charged and the consideration for the supply.

If an original tax invoice is lost, a copy can be provided that is clearly marked as a “copy”. It is not, however, lawful to issue more than one tax invoice for each taxable supply.

Sometimes, tax invoices are issued with incorrect particulars. Technically, such a document will not qualify as a tax invoice, and the recipient will be unable to use the document for deducting input VAT.

The recipient would request the supplier to issue a tax invoice with the correct particulars, and given that this would be a second invoice, it would be unlawful. The proposed amendment to the Act seeks to address this problem.

The proposed section 20(1B) states that where a tax invoice contains an error in the particulars, the supplier must correct that tax invoice with the correct particulars within 21 days from the date of the request to correct it. Having made that correction, the time of supply for that tax invoice as contemplated in section 9 of the Act remains unaltered. In other words, the date on the corrected invoice will not determine the time of supply, and the original time of supply remains.

The supplier is required to obtain and retain information sufficient to identify the transaction to which that tax invoice and the corrected tax invoice refers. Essentially, the supplier must maintain a proper audit trail between the initially issued document and the new re-issued document.

Graeme Palmer is a director in the commercial department of Garlicke and Bousfield Inc.

This information should not be regarded as legal advice and is merely provided for information purposes on various aspects of tax law.