SAICA: Updated Tax Guidance: Zero-rated exports

SAICA: Updated Tax Guidance: Zero-rated exports

• 09 December 2024
• Tax
• South African Accounting Academy

Summary:

SAICA has published an updated version of their Tax Guide on the Zero-rating of Exported Goods.

Article:

This guide was previously issued in April 2021.

This updated Guide provides an overview of the circumstances when the export sale of goods may be zero-rated, as well as the procedural and documentary requirements which must be met. The purpose of the Guide is, therefore, not to provide tax or legal advice.

This Guide deals with the following legislation:

• Value-Added Tax Act, No. 89 of 1991 (VAT Act);
• Government Notice R316 in Government Gazette 37580 of 2 May 2014 (Export Regulations);
• Customs and Excise Act, No. 91 of 1964 (C&E Act); and
• Tax Administration Act, No. 28 of 2011 (TA Act).

The entitlement to apply the zero rate to the exportation of goods constitutes a benefit to vendors conducting business in international markets, as it ensures that VAT charges and trapped VAT costs do not affect their competitiveness.

In view of the high level of VAT fraud, the procedural and documentary procedures which must be met in order to qualify for the zero-rating dispensation may create administrative and compliance difficulties and thus additional costs to vendors. However, the risk and cost of non-compliance with these requirements is much higher. It is thus essential that exporters ensure that the provisions of the VAT Act, the Export Regulations and IN 30(3) are adhered to in all circumstances.

This Guide is understood to be correct as at 29 November 2024, and it should be borne in mind that tax laws and practices can change over time.

Click here to download the 34-page Tax Guide:

https://saicawebprstorage.blob.core.windows.net/uploads/resources/Zero-rated-exports.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• Practitioners should adhere to the tax legislation that is applicable in SA.
• Tax practitioners, Auditors, Independent Reviewers and Accountants should always be aware of the latest publications issued by regulators, professional bodies and standard-setting boards, such as SAICA, as well as the contents of any practical considerations contained within this guide.

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