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Tax invoice example for Accounting

welcome to counts here we're going to look at the differences between a full invoice and an Abridged invoice now it is important to know the difference between a full tax invoice and an AB breached tax invoice especially for tax purposes now if you're receiving invoices for your expenses as a company or even as an individual now you usually don't pay attention into the details or it doesn't really matter much but if you're going to declare this as expenses when s or the revenue Authority asks you to upload supporting documentation you must make sure that it's ing to their requirements and there's a difference between a full invoice and an Abed invoice and this is also ing to the South African Revenue Service this is most important for those who are registered as vet vendors if you registered as a vet vendor we know that you will be collecting vet on behalf of s and you'll be paying over that amount to SZ but you'll also be claiming the vet that you would have paid on your expenses so you need to make sure that you're claiming on invoices for which you have the invoice as required by S now we've done another lesson where we went through vet registration and what are the pros and cons and what you need to consider you'll find the link to that lesson in the description below but here we'll quickly look at just the invoices the most important document on claiming input vet is the tax invoice as I've just mentioned if a tax invoice does not meet the requirements ing to the revenue Authority you are not permitted to claim the input vet for that particular tax invoice if you do there are serious penalties you may incur that is when they ask you for supporting documents and they realize that you have claimed for a specific expense even though it's a genuine expense if you don't have the invoice as per the requirements ing to the revenue Authority then you will incur penalties now one thing to note is that s requires that a tax invoice must be issued within 21 days from the time the supply was made so if you are the one who is the supplier and you're supplying products or goods or services to your customers you need to make sure that you do Supply them with an invoice within 21 days and even you as a client you need to make sure that you request the tax invoice from your suppliers within 21 days they need to supply you with this so you need to ensure that is the case you are required to issue a full tax invoice when the price is more than 5,000 Rand and the 5,000 Rand is that inclusive all right so if the amount inclusive of that is greater than 5,000 R then you need to provide a full tax invoice this is referred to as the consideration of the supplier you may issue an Abridged tax invoice when the consideration for the supply is 5,000 Ren or less than 5,000 Ren and remember it has to be inclusive of vet so if the total amount inclusive of vet is 5,000 r or less then you can issue an ABD tax invoice or you can receive an ABD taxt invoice and that would be fine with s if the consideration for the supply is 50 r or less a tax invoice is not required so it doesn't have to be a full tax invoice or an a brid tax invoice however a document Sugg just a teal slip or a sales docket indicating the vet charged by the supplier will be required to verify the input tax deducted so if the amount is 50 or less and I'm claiming the input vet on that expense I need to make sure that I have at least a receipt or a slep all right that you will have received it doesn't have to necessarily be a tax invoice now let's look at the full tax invoice what is included in a full tax invoice or what is required well this is required where the supply including vet exceeds 5,000 right I've already mentioned that so the first requirement is that it must contain the words tax invoice that invoice or invoice somewhere all right so you will see this on top of the invoice and it will be large enough for you to see it so that's very important it must contain those words text invoice vet invoice or invoice all right so you cannot use a delivery note for instance if it's written delivery note on top you can't use that as an invoice and provide that to the revenue Authority they will decline it all right so you need to make sure it's written tax invoice or vet invoice or invoice the second requirement here is that the name address and vet registration number of the supplier needs to be on the invoice okay so if your supplier is giv given you the invoice and you can see their name is there their address is there but their vet registration number is not there you need to ask your supplier to correct that all right you need an invoice with their vet registration number as well because you can't use that invoice and claim the input vet because if you ask for supporting documents and they see that the supplier details are not complete then you should not have claimed input vet on that particular invoice so that's very important the third one here is that the name address and where the customer is reg for vet the customer's vet registration number so if you are claiming for input input vet obviously you must be registered for vat then your name address and vet registration number also needs to appear on that invoice and this is very important because when we're dealing with clients we'll see that they will give us invoices um to do the vet schedules and you'll find that the customer details or their own details are not complete usually their vet registration number is not in that invoice you need to give your supplier your vet registration number so that they can include it on all your for invoices all right so you need to make sure your name your address and your vet registration number appears on it the fourth one here is the serial number or the invoice number and the date of issue of the invoice appears on the invoice as well so this is usually the invoice number it needs to have that number and the date of issue the fifth one here is it must have an accurate description of goods and or Services indicating where applicable that the goods are secondhand Goods very important if the goods are secondhand Goods it must be indicated but it must also have the description of of the goods or services that were supplied all right the sixth one we have is that quantity or volume of goods or services supplied needs to be indicated so if your supplier sold you five chairs it needs to indicate that there are five chairs which were sold to it can't just have the total amount it must indicate the volume or quantity of goods or services the seventh one we have here is the value of the supply which is the amount excluding vat the amount of the tax charged which is the tax amount or the vet amount and the consideration of the supply which is the amount inclusive of vat needs to be indicated on that invoice so you usually see that way it says the amount excluding vat it shows you the amount it shows you the vet amount and it shows you the amount inclusive of vet so those are very important details that need to appear and this is what constitutes a full invoice all right so if it doesn't have all these details then it's not a full invoice and remember if the consideration of the supply or the amount inclusive of V8 is greater than 5,000 R it needs to contain all these seven item okay so you need to ensure that's the case what about a brid invoice well let's quickly look at that this is required whether the supply including vat exceeds 50 rent and less than 5,000 Rent All right so if it's 5,000 rent or less and it's more than 50 rent you can issue an Abed invoice but a full tax invoice as well can be issued all right instead of an ABD so if you have a full invoice even though the consideration of the supply is 5,000 r or less that is perfectly fine in fact we always tell our clients that you you should prefer that your suppliers should issue you with full tax invoices all the time all right so that you don't run into that problem where the consideration for the supply or the amount inclusive of V is more than 5,000 R but they've just issued you with an Abed invoice all right you'll need a full invoice if the amount is greater than 5,000 Ren that is why we always tell our clients just ensure that you issued the full tax invoice just to avoid um those issues or those problems but if the amount is 5,000 r or less then that's fine you can get an abach invoice what is included there well the first one here it must include text invoice vet invoice or invoice so you can see the same as the full text invoice requirement number one the second one name address and vet registration number of the supplier needs to be indicated on the invoice the third one is the serial number or invoice number and the date of issue of the invoice needs to be indicated the fourth one it must have an accurate description of the goods and the fifth one here is the value of the supply which is the vet exclusive amount the amount of tax charged and the consideration of the supply which is the vet inclusive amount needs to be indicated so all this must be in place for it to be considered an AED invoice so you can note here that your details as the client or as the customer does not need to be on the invoice if the amount is 5,000 Ren or less then if your details are not appearing on the invoice that's fine as long as there has at least these five things on the invoice it will be acceptable I hope that has made sense I hope you now know the difference between a full tax invoice and an AED invoice and like I said You' prefer that you always issued with the full tax invoice so that you know all is in order all right so that you don't always have to look at the amount and then check that it meets the requirements we've gained value from this like this video And subscribe to the channel till next time cheers