January 29, 2015 at 4:13 pm #325Marican IncorporatedKeymaster
Get your Vat records in line with the Tax Administration Act!
Record-keeping is the most important aspect of Vat management as your records are the proof you
need to substantiate your claims and returns to SARS.
It can conduct a Vat audit on you within five years of assessing your Vat returns to query your audit
trails and accounting methods.
If your records don’t comply, you’ll face serious penalties of up to 200% now that the Tax Admin Act (TAA) is in effect.
2 Functions your records must full fill now the TAA is in effect!
When you’re deciding which records to keep, remember they must help SARS auditors with the
- Establish the nature, time and value of all taxable supplies relating to your business; and
- Reconcile your accounting records with the Vat returns you submitted.
Let’s take a closer look at the timeframe requirements for the records you’ll keep below.
Keep all records in their original format
You must keep the originals of all the documentation that’ll support your Vat claims. This is usually
the original hard copy invoice you received or the paper print-out if it was emailed to you.
You can also apply to SARS to let you to keep microfilm copies, computer tape records or CDs instead
of the original paper-based documents.
But paper-based records must be kept in their original format. Any photocopies must be clearly marked
You also have to keep your records for the specific timeframes required by SARS.
You’ll have to hold on to the following for 5 years:
- Vat returns and assessments (for five years after the date of assessment);
- Invoices of sales and purchases;
- Bank statements;
- Year-end working papers;
- Sales, tax and Vat records; and
- Salaries and wage registers.
Stock sheets for listed companies need to be kept for six years – five years if your company’s unlisted.
There are other documents that need to be kept for 15 years, while others should be kept no matter
what. Let’s take a look at them
Keep annual financial statements for 15 years
Annual financial statements must be kept for 15 years. This includes:
- Annual reports;
- Directors’ reports;
- Auditors’ reports;
- Books of account; and
- Fixed asset registers.
There are other documents you need to keep in original format no matter what. This includes a
certificate or statement from anyone who’s helped you to prepare your documents, but you’ll still be
the one responsible if your records are inaccurate. It’s a criminal offence not to keep all these records
MARICAN i n c o r p o r a t e d Maria Vannucci
for the prescribed period
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