Must an importer or an exporter be VAT registered?
No. It is not a requirement.
However, bear in mind that VAT is payable on all shipments that are imported into South Africa.
This means that an importer will pay VAT but, if not VAT registered, will not be able to claim it back as input VAT. In order to maintain the same profits they will have to charge higher prices than their competitors.
And what about exporters? They, also, are under no obligation to be VAT registered. Whether they are, or not, their customers will not pay VAT, because exports are zero rated. But, as with importers, they will not be able to claim the Input VAT on their purchases. In order to maintain the same profits they will have to charge higher prices than their competitors.
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You must register your business for Value Added Tax (VAT) if its taxable supplies exceed R1 million over a 12-month period. It’s important to note that zero-rated supplies, such as exports, are still considered taxable supplies and count towards this threshold.
Even though you levy 0% VAT on zero-rated items like exports, being a registered VAT vendor allows you to claim input VAT on the goods and services used to produce those items. This means you can still claim back the VAT on your business-related expenses.
This registration requirement applies to all businesses, regardless of their legal structure. So, if you operate as a sole proprietor or freelancer, you’ll still need to register for VAT if your business’s taxable supplies go over R1 million in a 12-month period.
Yes Fanus,
We all know that, thank you