Beware the perils of zero-rating

RECENT REPORTS of yet another major company having to fork out R18-million in VAT to SA Revenue Services (SARS) for goods that the retailer's customers were supposed to have exported have again highlighted zero-rating. According to a major forwarder the rules are very simple. Only the person who actually sells the goods and controls the transport of goods out of the country may zero-rate the transaction, FTW was told. So - unless the exporter arranges and pays for the transport of the goods out of SA, and can prove this Ð charging VAT at 14% is the safest policy. It is also worth noting that in order to zero rate the company has to obtain and keep various transaction documents for five years.