5 Top tips to use during a SARS VAT Verification

A2Following a discussion with fellow senior employees at the MMS Group we felt it necessary to share some essential tips regarding the SARS VAT verification process. It is essential that the correct documents are submitted within the correct timeframe. If you do not submit the correct information or insufficient information or you submit the documents late, SARS can:

  • Change the VAT verification to a VAT audit;
  • Raise additional VAT assessments.

This will result in additional time and resources to provide the information for a VAT audit or to prepare the necessary objections to the additional VAT assessments. My 5 top tips to use are:

  1. Update your information on SARS E-filing

Log into SARS E-filing and ensure all your details are correct on the system. It is important to ensure your e-mail address is correctly recorded on the system. This will ensure that all e-mail correspondence regarding the VAT verification is received by you.

  1. Inspect SARS E-filing & your e-mail inbox regularly

SARS normally will issue a VAT verification letter with a unique bar-coded reference which links to your VAT account within 24 hours after you have submitted your VAT return. Inspect your e-mail inbox for this letter. We have noted from all the queries received from the accountants at our clients that they tend to forget to inspect if SARS have issued the VAT verification letter. You can also log into your account on SARS E-filing and obtain this letter on the following basis:

  • Login to SARS E-filing;
  • Click on the VAT return that you submitted the previous day;
  • On the VAT201 work page on the top right hand corner under the SARS notifications section. There you will be able to download the SARS VAT verification letter.

You also need to regularly inspect your e-mail inbox for further notifications from SARS and additionally we recommend that you request a VAT statement of account on a regular basis from the SARS E-Filing system. You will immediately note on the VAT statement of account if SARS has raised an additional assessment that requires your attention.

  1. Submit all the requested information to SARS

This tip may seem obvious but we have noted that our clients VAT verifications are changed to VAT audits by SARS or that SARS raises additional VAT assessments. This is mainly due to the accountants at our clients not submitting all the requested information; or incorrect or incomplete information is send to SARS. The most important information required are clearly stated by SARS on the VAT verification letter and includes the following:

  • The original VAT verification letter issued by SARS. Attach this letter as the first page of all your supporting documents before you submit it to SARS.
  • The detailed VAT report/schedule. This should have detail of all the VAT Output and VAT Input and should agree to the VAT return that was submitted to SARS.
  • Supporting documents for the following:
    • Capital expenditure
    • Zero-rated sales
      • Valid zero rated sales invoices;
      • Customs road freight manifest (Details of goods in transit);
      • SAD 500
    • Imports
      • Valid tax invoice;
      • EDI Customs Status 1 release message;
      • Valid bill of entry, SAD documents;
      • VAT 404 – Customs VAT can only be claimed in the month it has been paid to SARS by the clearing agent or thereafter.
    • Input VAT
      • Highest value valid tax invoices.

We recommend that you submit to SARS for all the above items the supporting documents of at least 80% of Rand-value of all the transactions on the VAT Output & Input schedule.

  1. Submit the information to SARS within 21 days

Submit the correct information to SARS within 21 days of the date on the SARS VAT verification letter. We recommend that you submit the supporting documents on SARS E-filing. You can get access to the link for submission in the following manner:

  • Login to SARS E-filing;
  • Click on the VAT return that you submitted the previous day;
  • On the VAT201 work page there will be a link under the supporting documents section to up load and submit your information to SARS;
  • Ensure that all your files are saved in batches of 2meg or less before you try to upload the information on the system.
  1. Only submit VAT input claims if you have the valid supporting documents

You can use the following to inspect your documents before you submit the VAT input claims to SARS:

  • Full tax invoices (Consideration of R5,000 or more) Section 20(4) of the VAT Act. Items marked in Red is for Abridged tax invoices (Consideration less than R5,000) Section 20(5) of the VAT Act:
    • The words “tax invoice” or “invoice” or “VAT Invoice” reflected on the document;
    • Name, address and VAT registration number of the supplier;
    • Name, address and VAT registration number of the recipient; (Not required)
    • Serial number and date of issue;
    • Full and proper description of the goods or services;
    • Quantity/Volume of goods or services supplied; (Not required)
    • Price and VAT.

Contact us should you require assistance.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.  Errors and omissions excepted (E&OE)

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