Correction of tax invoices

Since it is illegal to issue more than one tax invoice per taxable supply, and another tax invoice may not be issued to alter any consideration in respect of an original tax invoice issued, the Value-Added Tax Act[1] prescribes very specific circumstances in which vendors may issue credit notes in respect of tax invoices that they previously provided in relation to supplies. These circumstances generally relate to the cancellation of supplies, changes in the consideration for the supply or a return of goods.

However, there are often circumstances where information on “invoices”, not relating to the circumstances indicated above, is incorrect. This could, for example, occur when “invoices” contain incorrect address details or VAT numbers. The recipient is then not allowed to claim input VAT on the “invoice”, since it does not technically constitute a valid “invoice”. National Treasury has, in the Draft Tax Administration Laws Amendment Bill 2018 issued on 16 July 2018, indicated that this creates uncertainty for vendors, specifically whether the issuing of a new document with the correct information will result in two tax invoices being issued for the same supply and, consequently, result in the vendor committing an offence. Since the initial document may also not have constituted a valid “invoice” or related to errors not listed as those for which credit notes can be issued it was unsure if, legally, credit notes could be issued in respect of these “tax invoices”.

Accordingly, in the 2018 legislative amendment cycle, National Treasury initially proposed that an “invoice” can be cancelled when it contains a material error. This proposal received some criticism during the public participation process, citing some technical deficiencies and practical constraints from accounting systems.

The proposal has therefore subsequently been redrafted and issued on 12 September 2018, to make provisions that a “tax invoice” can be corrected in several specific circumstances listed in the Act, which generally relate to the particulars that are required to be brought onto a document to make it a “tax invoice” (addresses, names, VAT numbers, individualised serial numbers, full and proper description of the goods etc.). The “tax invoice” must be corrected within 21 days of the date of the request for correction. The vendor must also obtain and retain information to identify the transaction to which the original tax invoice and the corrected tax invoice refers.

It is encouraging to see that National Treasury has taken public comments into account in the consideration of the new provisions, especially the practical implications. While the proposed amendment is still in draft, it is expected to be included, as is, in the final bill expected during October 2018.

[1] No 89 of 1991 (‘the Act’)

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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IC Marais

Professional experience:

IC Marais is a certified CA (SA) with public sector and private sector technical knowledge based on 5 years’ Public Sector accounting, auditing and financial management experience and 5 years audit, tax and accounting experience. Detailed knowledge of private and public sector accounting and auditing standards (GRAP, IPSAS, IFRS, IAS, ISA) and public sector financial legislation (MFMA, etc.)

He enjoys the outdoors, hunting and fishing.


Professional experience:

In 1995, Schalk started as a trainee at Warner and Newton (which became Moores Rowland in 1997 and then Mazars Moores Rowland in 2007) in Bloemfontein. In 1998, Schalk was appointed as manager at Moores Rowland, where he became a partner in 2003. Schalk received his Postgraduate Certificate in Advanced Taxation in 2006 and in 2009 he received his Certificate in the Administration of Estates.


Professional experience:

Cedric started as a trainee at Warner and Newton (which became Moores Rowland in 1997 and Mazars Moores Rowland in 2007), Bloemfontein, in 1986. After completion of his articles, he joined the Special Investigations Division of the Department of Finance (SA Revenue Services) as a senior inspector from 1990 to 1991.


Professional experience:

Lucha started her career as a tax inspector at the Inland Revenue Department of New Zealand. After this she worked in commerce in Canada, Mexico and the United States.

On her return to South Africa, she completed her CA training contract with us and has been with Newtons ever since. She became a Partner in 2012.

Apart from her CA(SA) qualification she also holds a postgraduate certificate in Advanced Taxation (2005) and has the overall responsibility for training as our Training Officer.