New VAT ruling catches exporters unawares

Big penalties for non-compliance ALAN PEAT IF YOU are an exporter, you have three months in which to present all the necessary documents to customs if you want your goods zero-rated from a VAT point-of-view. And non–compliance carries burdensome and administrative penalties, according to Riaan de Lange of trade consultants, PricewaterhouseCoopers. This follows his recent warning that just too many exporters seem unaware of the changes in the VAT Export Incentive Scheme that have just become applicable. “It has become apparent that companies, and clearing agents for that matter, are not aware of the recent changes in the scheme, which were effective from April 1.” This was where the VAT interpretation notes 30 and 31 were issued by customs – and where note 30 replaces the VAT practice note 2, dealing with direct exportation of goods by a vendor to countries outside SA (i.e. the situation where the exporter delivers or consigns the goods). Also, blanket rulings obtained by exporters regarding the extension of time to receive payment have been withdrawn. And it could cost you if you have not got all your new VAT Export Incentive Scheme document ducks in a row within the three-month deadline. “The effective date was April 1,” said De Lange. “While the possibility of changes was not unexpected, it was anticipated that announcements would allow time for vendors to be able to implement the changes. “In terms of both interpretation notes, should the vendor fail to obtain the appropriate documents timeously, then he is required to account for output tax at the standard rate by applying the tax fraction to the invoice value.”