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VAT rate where vendor prepares import/export documentation for importers and exporters

Thursday, 06 November 2014   (0 Comments)
Posted by: Author: SAIT Technical
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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 standard rate:

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.



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