HomeHome SearchSearch MenuMenu Our productsOur products

NEWS FLASH: New VAT amendment that affects you if you export goods

by , 18 April 2016
If you sell goods, that are zero-rated, to a client who's in a Customs Controlled Area or an Industrial Development Zone (IDZ), there's a new VAT amendment that affects you and is effective 1 April 2016.

One of the old requirements was that if you consign the goods i.e. you pay a transporter (or 'cartage contractor') to transport the goods to these areas, you can ONLY zero rate if the Transporter's MAIN BUSINESS ACTIVITY is transport.

Read on for the new change...

Changes to tax law you WON'T hear about in the news...

If you're responsible for payroll, fringe benefits or tax in your business OR if your work involves anything SARS related, the Tax Watch Newsletter service is a tool you should definitely consider investing in.
A subscription not only gets you a printed newsletter every month, but it also lets you contact an expert via our online Tax Watch helpdesk as often as you need to – completely free of charge.
And there are going to be a lot of questions that will need answering this year...
In the coming months the tax law will undergo a number of significant changes.
The majority of these will affect the duties of tax professionals and, in particular, their liability for offences committed under their watch.
But you won't hear about these changes on the six o'clock news.
I doubt they'll even get a mention in the national press.
If you want to be 100% certain you're up to speed with changes to TAX Law, try the Tax Watch Newsletter today.
I can send you your first issue free, and then it's up to you whether you want to continue with your subscription. Yes, I'd like to try Tax watch
The new change is…
Section 11 of the VAT Act has changed. The Transporter's business activity MAY INCLUDE transport of goods. So now, you can use any company to transport goods to your clients in a Customs Controlled Area or an IDZ, as long as the activities of that company 'includes transport'.
Let's look at an example to break this down…
Waldo's Watch Warehouse, based in Midrand, sells watches to a client at Coega, which is in a Customs Controlled Area. Waldo applies the zero rate of VAT to the invoice and appoints 'Calvin's Carpets and Transporters' to transport the watches to Coega.
The VAT Implication:
Before 1 April 2016, Waldo wouldn't have been able to apply the zero rate of VAT as his transporter's business activities were both carpeting and transporting.
After 1 April 2016, Waldo can now apply the zero rate of VAT because Calvin's business activities include transport.
Read on to find out how you can make VAT on exports easy…
Some enterprises still aren't registering for VAT. Are you one of them?
Are you running a business? Or even starting a new one? SARS changed the definition of an enterprise a while ago. And while this may be old news to you, some companies still aren't registering for VAT.
If you're liable to register for VAT and don't – you're guilty of a criminal offence. You may even go to prison. And the penalties and interest you would have to pay on your late VAT returns are harsh.
Click here to avoid this!
Make VAT on exports easy
Get your copy of the Practical VAT Loose Leaf, where we show you:
  • How to make sure you classify your exports correctly else SARS force you to pay output tax and charge you with penalties and interest
  • 6 Documents you have to keep to apply the right VAT rate to direct exports
  • How long you must keep supporting documents for
  • 3 Tips to deal with direct exports
  • 3 Tips to deal with indirect exports
Until next time,
By Natalie Cousens,
Managing Editor: The Practical VAT Loose Leaf.
P.S. If you're not yet a subscriber, your Practical VAT Loose Leaf gives you a complete 30-day review period, so you risk absolutely nothing. Study it at your leisure for a full month after you receive it. If you are not entirely satisfied that this unique publication will keep you out of the taxman's clutches, just return your copy for a full, no-questions-asked refund.

Related articles

Related articles

Watch And Learn

Related Products


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance

Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today

Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism

This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands

Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>