VAT rate where vendor prepares import/export documentation for importers and exporters
06 November 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: A VAT vendor
provides the service of preparing documentation and liaisons at the border for
importing and exporting containers. For example a company will phone him and
tell him they have a client that needs to export or import 2 containers and he
needs to organise the export documents for a fee i.e. (he is a middleman). He
has the following Items on his invoice listed at the zero rate:
- Customs Documents - Zero Rated
- Cargo Dues - Zero Rated
He also has the following items listed on his invoices at a
Documentation preparation service - Standard Rate
I know that international transport services are zero-rated but
my concern is that he is the middleman and does not deal with the
importer/exporter directly therefore should he not be charging a standard rate
for all items on his invoice.
A:The information provided may not be
enough for us to provide the guidance required.
You are correct that, in terms of section 11(2)(a), the supply of
services (not being ancillary transport services) comprising the transport of
passengers or goods from a place in the RSA to a place in an export country can
be zero rated. This assumes the required
documentary proof was obtained and kept.
It doesn’t appear that service supplied is "ancillary
transport services”. It is possible
that in this instance the services comprise the insuring or the arranging of
the insurance or the arranging of the transport of passengers or goods to which
any provision of paragraph (a), (b) or (c) applies – section 11(2)(d). With the required documentary proof, the rate
of zero per cent can apply to the service.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.