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How to apply the zero rate to international transport policies

by , 08 May 2015
When it comes to applying the zero rate to the international transport policies, you need to know each steps of the procedure, the documents you'll need and the options you have in case the procedure gets interrupted or the instution submits an objection.

Here's how the zero rate applies to your international transport policies

Keep in mind that as a short-term insurer you can apply the zero rate of Vat to your short-term insurance contracts for international transport services if:

• You enter your short-term insurance agreement before the international transport takes place; or
• You arrange short-term insurance for international transport and international transport services.
Important: You must have documentation to prove you zero-rated these services.

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Are there any inaccuracies in your Vat invoices? You may be charged a very high penalty!

If SARS finds inaccuracies, you'll be assessed, held liable to penalties, interest and possibly even additional tax!

Click here to find out how to make sure your Vat invoices are 100% legal.


When it comes to the documents you need to prove the supply was zerorated, note that you need to get proof within 90 days of the date of the supply that the supply was zero-rated.

This proof can be:

1. Your copy of the zero-rated tax invoice;
2. A copy of the insurance contract;
3. A copy of the transport contract and the applicable transport document. This must show the collection and delivery addresses or the point of origin and the point of destination of the transport;
4. A copy of the ticket issued by the vendor to the recipient of the international transport service;
5. Proof of delivery of the goods;
6. Proof of payment; and
7. Proof that the underlying transport service was zerorated.

But what should you do if you don't get your documents in 90 days?

Keep in mind that in case you don't get this proof within the 90 day period, you must add the zero-rated amount back as a standard-rated amount and calculate the Vat on it.

However, if you receive the proof within five years, you can then claim this amount as an input tax adjustment.

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