So, you want to export your products?
If you’re in the business of making and selling products (or traditionally called manufacturing) then it may be in your plan to one day export your product across South Africa’s borders. Sales in South Africa could at any time run dry or be put under pressure, so it’s always a good idea to have a Plan B, or alternative market to sell to.
Or perhaps you are exporting your products already, but are unsure if you’re doing it according to our tax laws?
What are SARS’ requirements to export?
We recently had a client ask if we had a checklist or one pager summarising the requirements that need to be met when exporting and the documents that are required to issue a zero rated invoice.
So, we decided to do just that – create a one pager about exporting from South Africa and the VAT requirements.
It is important to note that any business that is registered for VAT, and sells an item to an overseas customer, is obliged to charge VAT.
However, when a business is registered for VAT, and has a Customs code (registered for customs and excise) then there is a possibility that the transaction can be zero rated.
Zero rated means that VAT is still charged, but at a rate of 0%.
If you follow the above one pager decision tree above, you should reach the correct decision. In the end if you are unsure, it will be wiser to issue an invoice with standard rate VAT of 15% than fall short of SARS tax and VAT rules.
If you need some help, you are also welcome to contact The Accounting Company for some advice.