What is a VAT refund on exported goods?
It is VAT which can be claimed by the qualifying purchasers on movable goods purchases in and then exported from South Africa. You will only qualify if the VAT is charged at 14%. Please note that the VAT refund on exported goods will only be applicable to goods. All services are excluded.
Who can qualify for a VAT return on exported goods?
A qualifying purchaser is defined according to the VAT Export Incentive Scheme. It is defined as the following:
|Non-resident.||A person who is not a South African passport holder and who is not a citizen at the time of purchase. A permanent resident of an export country, who orders movable goods from South Africa and has these goods exported on their behalf by a qualifying purchaser’s cartage contractor.|
|Tourist||Any individual that is not a South African passport holder, which travels to South Africa. The person is not a South African citizen and exports movable goods from the country in accordance with the provisions of the scheme mentioned above.|
|Foreign enterprises.||A foreign enterprise or business which is carried on continuously or regularly by any person in an export country. This is applicable when goods and services are supplied to any other person for a consideration.|
|Foreign diplomats.||When a diplomat was stationed in South Africa and then departs on the completion of his or her term of duty. When movable goods are exported in accordance with the scheme mentioned above, th VAT refund on exported goods become applicable.|
What Steps must I take?
All claims are processed by the VAT Refund Administrator (VRA). It is the company that administers VAT refunds on behalf of SARS. The following requirements must be met before the VRA can consider the VAT refund claim:
- The goods must be exported from South Africa within 90 days from the date of the tax invoice.
- A refund will be considered only where the VAT inclusive total of all purchases exported at one time exceeds R250.
- The request and the relevant documentation must be received by the VRA within three months from date of export.
- The goods must be exported from South Africa through one of 43 designated commercial ports by the qualifying purchaser.
- If goods are exported through a port of exit other than designated port of exit all customs declaration must be processed 24 hours prior to arrival at the port of exit and the goods will be examined by the South African Police Service.
What happens at land border posts?
- The qualifying purchaser must present themselves and the movable goods and the tax invoice to the RSA Customs Official.
- The Customs official may examine the movable goods to ensure that they correspond with the description on the tax invoice.
- The qualifying purchaser must present themselves and the movable goods and the tax invoice to the Customs Official in the export country
- The qualifying purchaser must submit the claim documents to the VRA office; they can either send them by post to VRA head office or take them to the VRA office in their country if the office is available.
- In case of the registrable goods; the qualifying purchaser should first register them in their country and obtain registration documents as proof.
What happens at international airports?
- The qualifying purchaser must present themselves and the movable goods and the tax invoice to a VRA/ RSA Customs Official
- The VRA/RSA Customs official may examine the movable goods to ensure that they correspond with the description on the tax invoice.
- The VRA/ RSA Customs official may endorse and return each tax invoice to the qualifying purchaser.
- The VRA official will issue a VAT 255 that summarizes the tax invoice details.
- The qualifying purchaser must sign the VAT 255 as a confirmation that the details it contains, are correct.
- A copy of the VAT 255 must be issued to the qualifying purchaser.
High-value goods, such as jewelery and cameras, must be verified by a VRA officer after the tourist has gone through Immigration. This process applies to the following international airports:
- OR Tambo International Airport.
- Cape Town International Airport.
- King Shaka International Airport.
Which documents are needed?
Make sure that you have the following documents on-hand before you apply for your Vat Refund on Exported Goods:
- The original tax invoice that features a VAT number.
- A copy of your passport with entry and exit endorsements by Immigration.
- Proof that the qualifying purchaser declared the goods for customs purposes in the export and import country.
- A copy of the originally certified registration document for registrable goods. Foreign enterprises mush present a copy of their trading license, together with the authorisation letter. Foreign diplomats should have a letter from the embassy or consular. It must indicate that the diplomat’s term of office has lapsed.
How is it calculated?
VAT will be refunded as per VAT amount reflecting on the tax invoice if new goods are exported. Notional Input Tax and Open Market Value will be considered for a refund on registrable goods and other second hand goods. The Commissioner determines the amount refundable in the event that second-hand goods were purchased. If the movable goods consist of second-hand goods and a notional input tax credit was claimed by the VAT-registered vendor when the goods were acquired, the refund will only be the amount of tax in excess of the notional input tax claimed.
When second-hand goods are purchased from a VAT-registered vendor, tax cascading is prevented by allowing a deemed input to the VAT registered vendor. Please note that there is a 1.3% administration fee of the total VAT inclusive amount that subject to a minimum of R10 and a maximum of R250. It’s levied by VRA for processing the refund but the fee may change from time to time.