Good news for exporters as Treasury changes VAT rules for private terminals
How South African exporters can benefit from new VAT regulations that simplify processes for goods delivered to licensed terminal operators
South African exporters may soon benefit from clearer guidance on zero-rated VAT for goods delivered to licensed terminal operators, according to amendments by the National Treasury and the South African Revenue Service (SARS). The modifications enable qualifying goods to be delivered to terminal operators licensed by the port authority, addressing issues where previously, goods needed to be delivered to the port authority or other specified parties.
The amendment targets the section of regulations governing the zero-rating of exports to qualifying purchasers, particularly when the goods are initially delivered to a harbor. Under current rules, one requirement for a vendor to zero-rate the export is that the goods must be delivered to specific entities like the port authority, ship master, container operator, or aircraft pilot.
This wording has caused practical difficulties, as exemplified by the Richards Bay Coal Terminal (RBCT), a privately owned operation within the Richards Bay harbour precinct. RBCT, which uses port infrastructure from Transnet National Ports Authority (TNPA), faced complications when delivering coal destined for export, as the previous rule did not consider such deliveries as meeting the port authority requirement.
This amendment to the Export Regulations aims to facilitate zero-rating for moveable goods exported from South Africa to terminal operators and port authorities, simplifying the process and reducing bureaucratic hurdles.
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