Logistics specialist debunks popular zero-rating theory

ALAN PEAT
THERE IS a “popular fallacy” that could throw certain exporters’ value added tax (VAT) aspirations out of the window. Safcor Panalpina’s senior freight auditor, Jeff Epstein, reminded exporters that “only the entity responsible for arranging and paying for the physical removal of export articles from SA” may zero-rate the sale for VAT purposes. “The right to zero-rate sales is subject to the exporter obtaining and keeping for a five year period all of the required documents stipulated in the regulations,” he told FTW. “However, claims by ex-works purchasers that they should not be charged VAT because they intend exporting the goods in question are nothing more than a popular fallacy.” Ex works sales are in reality domestic sales and vendors are obliged to charge VAT on such sales at the standard rate of 14%. “Exporters are required to pay the VAT on their exports if they do not receive the requisite documentary proofs and payment for the goods within the time frames stipulated in the legislation.”