VAT and exporting goods

[DigitalSoldier]

Hi guys,

When exporting to other african countries especially the SADC do I include VAT and does the importer then have to pay the VAT ?

Reason I am asking. We recently quoted a company in Swaziland on goods and the accepted the PO, and paid the full amount before we even delivered, but the amount they paid do not include the VAT.

 

[HavocXphere]

EDIT: As KalMaverick points out - zero rated, not exempt.

Exports are exempt - its intended to encourage exports.

 

[DigitalSoldier]

But we pay VAT on all the products being exported.

Also do we then have to pay VAT on the money received from them ?

 

[KalMaverick]

But we pay VAT on all the products being exported.

Also do we then have to pay VAT on the money received from them ?

Why?

Exports are zero-rated...

Exports are exempt - its intended to encourage exports.

I'm sure you meant to say zero-rated.

 

[HavocXphere]

I'm sure you meant to say zero-rated.

eish. My bad.

 

[krono9]

Just a note.. and its one of the most common mistakes I see at our audit firm during audits.. Exports are zero rated.. ok.. but you also then have to be responsible for lets say the courier cost / shipping cost to get the goods to the export country. If the client(foreign client) sends their courier to pick up the goods say at your office in south africa.. then its not a zero rated transaction... Your courier / freight company is seen as an extension of your company if you pay the bills......

 

[KalMaverick]

Just a note.. and its one of the most common mistakes I see at our audit firm during audits.. Exports are zero rated.. ok.. but you also then have to be responsible for lets say the courier cost / shipping cost to get the goods to the export country. If the client(foreign client) sends their courier to pick up the goods say at your office in south africa.. then its not a zero rated transaction... Your courier / freight company is seen as an extension of your company if you pay the bills......

Why not? As long as you have the documentation to back it up it is still seen as a direct export and will be zero-rated.

 

[krono9]

Why not? As long as you have the documentation to back it up it is still seen as a direct export and will be zero-rated.

Found a quick summary on a google search. http://www.thesait.org.za/news/116108/Requirements-to-zero-rate-exports.htm

The main reason is that I'f you did not pay the courier. You do not get the export documents etc. there are a few binding rulings and guides on this issued by SARS too.

 

[panayi]

Found a quick summary on a google search. http://www.thesait.org.za/news/116108/Requirements-to-zero-rate-exports.htm

The main reason is that I'f you did not pay the courier. You do not get the export documents etc. there are a few binding rulings and guides on this issued by SARS too.

SARS has published an interpretation guide on this - so many people get this wrong. Look for interpretation note no. 30. You need to arrange and pay for the courier, have proof it left SA, entered into the other country AND have a POD, to make that sale VAT exempt. SARS got wind of people claiming to export, but not exporting and thus getting a 14% discount, so they put the onus on the supplier to make sure the good have left SA. If the guy wants to use his own courier, he pays VAT to you and claims it back at the border.

 

[krono9]

SARS has published an interpretation guide on this - so many people get this wrong. Look for interpretation note no. 30. You need to arrange and pay for the courier, have proof it left SA, entered into the other country AND have a POD, to make that sale VAT exempt. SARS got wind of people claiming to export, but not exporting and thus getting a 14% discount, so they put the onus on the supplier to make sure the good have left SA. If the guy wants to use his own courier, he pays VAT to you and claims it back at the border.

Yeah. Most people get this wrong. Glad someone else agrees. Was seeing a forum war coming. It's Zero rated. See you mentioned exempt

 

[KalMaverick]

Found a quick summary on a google search. http://www.thesait.org.za/news/116108/Requirements-to-zero-rate-exports.htm

The main reason is that I'f you did not pay the courier. You do not get the export documents etc. there are a few binding rulings and guides on this issued by SARS too.

Thanks, quite interesting. I get it now.

Would love to know the OPs situation now.

 

[sly]

You can only claim the VAT if you have POD, you cant fool SARS because they have to clear the zero rated VAT invoice when you exporting goods on your exporters code. if the client has SADC origin certificates, they don't pay duties at their country for some goods. The courier needs the documents as part of the road manifest. depending on who clears the goods at the destination country, All the documents have to sent to the clients clearing agent or else the goods will be impounded at the border by SARS

 

[IzzyLee]

Hi All

We need to export goods to Swaziland. But the items we need to send will be zero rated. We also need to charge them for our courier company to export the goods to them. Do I charge the client VAT on the courier service or will that also be zero rated?

 

[Venomous]

Hi All

We need to export goods to Swaziland. But the items we need to send will be zero rated. We also need to charge them for our courier company to export the goods to them. Do I charge the client VAT on the courier service or will that also be zero rated?

Charge zero rate but make sure you cover your direct expenses.

IE R100 ex is R114

Just charge the customer the R114 as an exvat figure. Else you will lose out on your costs.