Let's say you run a large manufacturing company across Africa. Your headquarters are here in South Africa. And, from time to time, you temporarily import machines into the country for repairs.
As an importer, you have to pay Vat on anything you bring into the country.
But, what you might not know, is you can apply the zero Vat rate to this temporary import. But first, you have to follow these two steps or SARS will penalise you...
Claim your temporary imports for repairs on zero Vat rate by following these two steps
Step 1: Declare the import to customs as 'temporary for repairs'
Submit a letter explaining why you're importing the machine. Go into details such as what repairs you need to do, why you have to do them here and who's going to do them.
You'll also need to submit supporting documents such as:
- Commercial invoice;
- Company banking details;
- Airway bill to the Permits Unit; and
- A copy of the procedures and systems from the customs office in the country the machine came from.
The officials at customs will mark your machine so they can identify it when you export it again.
Make sure you get a Temporary Consignment permit from customs to say you can apply the zero Vat rate when you do this.
Customs will check it when you export the machine. If you don't have it, they'll charge you Vat on the export as usual.
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Step 2: Complete the Vat262 form to use the zero Vat rate for your import
This form is specifically for goods you import into SA for repairs.
On it, you must put details such as:
- Make and Model Registration or Serial No.;
- Engine, Chassis or Vin number and any other identification;
- Your name;
- Your passport number;
- Your nationality;
- Your business's name;
- Your signature as the Importer ;
- The date you completed the form;
- The serial number of RSA Customs' importation documents;
- The serial number of RSA Customs' DA 70;
- Full Name of Customs Official;
- Telephone number of Customs Official;
- Customs official's signature; and
- Your company's physical address outside South Africa.
You must get this form from customs and make sure it has the original customs' stamp on it.
This is very important because without a correctly completed form, SARS will reject your application. And it will expect you to apply the normal 14% Vat rate to the import as a result.
So be careful when you temporarily import a machine for repairs. If you don't export it back within six months, customs and SARS will come looking for you and expect you to pay your import duties and Vat.