All VAT-registered entities in South Africa are required to display their VAT number on their invoices and in other relevant circumstances. This helps make interactions with other VAT-registered vendors easier and assures them that they are dealing with a legitimate company that is honestly registered with SARS. This becomes even more important when you are a B2B company, and not selling your goods to the end user. However, fraud is always a business risk, and you can’t simply trust that the given details are true and in good standing. How do you check the validity of a VAT number? Today we look at convenient ways to do so, as well as some other important issues you should consider.
How Can I Check If A VAT Number Is Valid?
You can check if a VAT number is valid in South Africa by accessing the SARS VAT vendor portal to check it. You will input the VAT number you have been given, which should be a 10-digit number with no letters or special characters, and the system will check and verify it for you. The system is very literal and needs the VAT number in the correct format, so double-check everything when you enter it.
If you encounter a problem or cannot find the VAT number you have been given on the system, you can also contact the SARS helpline for further assistance. Do remember that the company’s income tax number, while also a 10-digit number issued by SARS, is not the same as its VAT number.
Why Is My VAT Number Invalid?
Your VAT number may show as invalid for several reasons. Firstly, check you are using the correct number- your VAT number, attached to the VAT tax type and shown on your Notice of Registration. It is common to accidentally confuse this number with your income tax number. They are not the same. You could have also made a simple mistake.
If you are confident you are using your SARS-issued VAT number and it still shows as invalid, however, there is likely to be a problem. You could have lapsed out of eligibility for VAT registration through reduced turnover if you are a smaller business. The VAT thresholds are currently R50,000 in taxable income over a 12-month period for voluntary registration, with compulsory registration after you pass one million rand in taxable turnover.
You may also be non-compliant regarding your VAT returns and will need to bring this and your account up-to-date before you can continue. If none of these scenarios seem valid, we suggest you get in contact with SARS directly to investigate and resolve the issue.
How Do I Verify A Company In South Africa?
There are several types of company verification you can do in South Africa. To verify a company is registered for VAT, head to the SARS VAT portal we linked above and check if the VAT number is legitimate. If you want to check that a company exists and is still active and trading, you can do so through CIPC, the company registrar in South Africa. If you are worried about a company’s overall tax compliance, you can ask to be provided with a PIN to verify they are tax compliant. This is a newer system instigated by SARS to replace the older Tax Clearance Certificate, and gives near real-time data on tax compliance.
What Does SARS Require For A Valid VAT Invoice?
There are 7 criteria needed for a valid VAT invoice in South Africa. These are as follows:
- It must contain the words ‘VAT Invoice’. ‘Tax Invoice’ is valid for an invoice where no VAT is being claimed, but cannot be used for VAT purposes.
- The name, address, and VAT number of the other party
- The issuing company’s VAT registration number, name, and address
- A serial number and date for the invoice
- An accurate description of the goods/services provided
- The quantity of goods/services
- Their value, as both the intrinsic value and taxed value (i.e. VAT-exclusive and VAT-inclusive). The tax charged must be clear
How Do I Check If A VAT Number Is Valid In South Africa?
The easiest way to check if a VAT number is valid in South Africa is by entering the provided VAT number into the SARS VAT vendor portal. This will easily and conveniently check the VAT number against SARS’s records and report back on whether it is valid and to whom it was issued. Make sure that the VAT number is not just valid, but matches with the company you are trading with. If you encounter any issues with this process, you can contact the SARS helpline for further assistance. The most common issue is a mistake in the VAT number format itself.
Checking the validity of a VAT number is an important step before you do business with another VAT-registered company. Now you know how to do it, too.
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