What makes a tax invoice valid?

An invalid tax invoice costs the RECIPIENT, not the issuer: without a valid one, your VAT-registered customer cannot claim the input VAT on what they paid you, and their accountant will bounce your invoice back. Issuing valid documents is therefore a customer-service problem before it's a compliance one.

In South Africa the checklist lives in section 20 of the VAT Act, and it splits at R5,000.

The full tax invoice (over R5,000)

Where the consideration exceeds R5,000, a valid tax invoice must contain all of the following:

• •The words “tax invoice”, “VAT invoice” or “invoice” stated on it
• •The supplier's name, address and VAT registration number
• •The recipient's name, address and — if they're a vendor — their VAT registration number
• •A serial number and the date of issue
• •A description of the goods or services (and the quantity or volume)
• •The consideration and the VAT: either the amount and the tax shown separately, or the inclusive amount with a statement that it includes VAT at the rate charged

The recipient's details are the requirement people miss. “Cash sale” at the top of a R20,000 invoice makes it invalid for the customer's input claim — they need their registered name on it.

The abridged invoice (R5,000 and under)

At R5,000 or below, an abridged tax invoice suffices: the recipient's details fall away, and a description without quantities is fine — the rest of the list stands. Below R50, no tax invoice is required at all (a till slip does), though the vendor still accounts for the VAT.

Only VAT vendors issue tax invoices

If you are not registered for VAT, the words “tax invoice” must NOT appear on your documents, and you must not show VAT. Charging VAT without registration is an offence, and it happens innocently — a template downloaded from the internet with “Tax Invoice” in the header. Your document is simply an invoice. (Whether you should be registered is its own question — see when VAT registration is compulsory.)

Which numbers go on an invoice — and which never do

A company's registration number belongs on its business documents — the Companies Act (s 32) requires the company's name and registration number on notices and official publications, and customers' vendor-onboarding forms will ask for it anyway. Your VAT number belongs on tax invoices, as above. But your income tax reference number does NOT belong on a sales document — ever. It identifies your whole tax profile, it's a key used to verify you with SARS, and printed on every invoice you hand out it becomes raw material for impersonation and fraud. No rule requires it there; leave it off.

Botswana differs

Botswana's VAT Act has its own tax-invoice requirements (s 23), enforced by BURS: only registered persons issue tax invoices, the document must say “tax invoice”, and it must carry the supplier's name, address and VAT registration number, an individualised serial number, the date, a description, and the consideration with the 14% VAT shown. The same discipline about the recipient's details applies for their input claims — and the same caution about your TIN: it identifies you to BURS and doesn't belong on sales documents.

Invoices from Ledgr

Every invoice Ledgr issues carries the fields the law asks of it for your registration status — and refuses to dress a non-vendor's invoice as a tax invoice. If a detail is missing that would make the document invalid for your customer, Ledgr warns you before you send. It warns; it doesn't block. The document is yours.