The export of goods from South Africa is subject to VAT at the zero rate provided certain requirements are met, as follows:
- Direct exports – the requirements are set out in Interpretation Note 30 (Issue 3) dated 5 May 2014 (IN 30); and
- Indirect exports – under Part Two of the Export Regulation (published in Government Gazette (GG) 37580 on 2 May 2014) a vendor may, under certain conditions, elect to supply goods at the zero rate if those goods are contractually delivered in South Africa to the recipient or the agent of the recipient, but are ultimately destined for export.
In the case of direct exports, the vendor physically delivers the goods, or the vendor’s cartage contractor must deliver the goods to a recipient in an export country. In the case of indirect exports, the goods must be removed from South Africa by the recipient, or the recipient’s agent, for conveyance to an export country in accordance with the Export Regulation.
Part One of the Export Regulation applies where the qualifying purchaser is responsible for exporting the goods from South Africa and the vendor is obliged to levy VAT at the standard rate. In this case, the qualifying purchaser will be entitled to a refund from the VAT Refund Administrator (VRA), subject to the conditions in the Export Regulation being met.
The documentary evidence, as prescribed under IN 30 and the Export Regulation, includes the export documentation as prescribed under the Customs and Excise Act, 1964. It follows that in order to meet the requirements in IN 30 or the Export Regulation, to zero-rate a supply, or to obtain a refund from the VRA, the requirements under the Customs and Excise Act relating to the exportation of goods, must be met. Refer to the Customs and Excise Exporters Page on the SARS website for more detail on who is regarded as the exporter in different circumstances, and the procedure to register as an exporter.
Any person (whether local or foreign) wishing to export goods from South Africa, must register as an exporter under the Customs and Excise Act, and make the relevant export declarations. In the case of a foreign exporter, that person must register as an exporter and nominate a registered agent in South Africa. Limited exceptions for formal registration include a traveller who exports goods (other than scrap metal) where the value required to be declared is less than R150 000 during any calendar year, regardless of the number of consignments during that year. The following persons must register as an exporter and make the relevant declarations in respect of the export:
- Direct exports – the vendor that consigns or delivers the goods to an export country
- Indirect exports – the qualifying purchaser
The correct person must accordingly be reflected as the “exporter” on the SAD 500, in order to comply with the provisions of the Customs and Excise Act, and the relevant documentary requirements contained in IN 30 and the Export Regulation.
VAT Rulings can only be issued in respect of the application of the VAT Act in respect of a specific set of facts. On that basis, no VAT Rulings will be issued on whether the provisions of the Customs and Excise Act are met, or to confirm the documentation required under that Act.
Source: gov.za
