GUIDE TO: VAT and Exports

Export VAT implications:

We will be referring to two parties in this guide, namely the “supplier” and the “purchaser”. The supplier is the party offering the goods for sale to be exported, whereas the purchaser is the party buying the goods from the supplier.

VAT on goods exported is normally charged at a rate of 15% (standard rate), or 0% (zero rated). When exporting goods from the RSA to any export country, you have to distinguish between two types of exports, called direct and indirect export.

Understanding Export VAT
The different export scenarios pertaining the VAT

*Note that for the Cartage contractor to qualify, transport must be his main activity, and he must be registered as a VAT vendor

Direct Export:

This is when the supplier delivers the goods to a client at an address in an export country. The supplier will be in total control of the export and is responsible for all aspects of the exportation.

In order for the vendor to apply the zero rate to the goods, the vendor must-

  • Export the goods via a designated commercial port (see list below) within the prescribed time period
  • Acquire and keep the required documentation

 

Indirect Export:

An indirect export is where the recipient (from the export country) removes or arranges for the removal and transportation of the goods purchased in the RSA to an address in an export country. In this case the supplier must add the 15% VAT and the recipient may then claim a refund from the VAT Refund Administrator (the VRA).

The supplier may otherwise choose to supply the goods to the purchaser at the zero rate (no export VAT). This can be done when the supplier is able to ensure that the goods are delivered to a harbour or airport which is a “designated commercial port” (from the list below), from where the goods will be exported by the purchaser.

As the supplier will be held accountable if the conditions are not met, it is up to the supplier to decide whether to apply the zero rate, or to apply the standard rate.

 

Designated commercial ports:

Designated commercial ports to claim Export VAT
Designated commercial ports to claim Export VAT

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