Direct Exports Zero Rated for VAT

[Justloadit]

Nothing wrong with what you have done, provided the transport RSA company directly ships the goods to Zimbabwe. The claiming of the VAT on the local transport invoice is the correct procedure.

in the case that a Zim based transport company does the delivery of the goods, in most likelihood, they would issue a Zim based invoice for the services, which would require you to make a forex payment. There is no VAT claimable on this. Looking at it holistically, it is a much of a muchness to use either method. There is a small draw back on using a foreign transport company, in that you have to do a bank request to allocate forex payment for you.

[Export_Co]

Thank you very much.

Is the bank request to allocate a forex payment just in order pay the Zimbabwean transporter?
The reason we looking into this is because transport from here is so expensive, Zimbabwean transporters are offering cheaper rates.

If we were a RSA based transport company and we had a foreign client who hired us to collect goods in the foreign country and deliver them to a RSA based company, would we zero rate the transport invoice as an export service or would we have to charge them VAT?

[Justloadit]

Thank you very much.

Is the bank request to allocate a forex payment just in order pay the Zimbabwean transporter?

Yes

If we were a RSA based transport company and we had a foreign client who hired us to collect goods in the foreign country and deliver them to a RSA based company, would we zero rate the transport invoice as an export service or would we have to charge them VAT?

Since you are invoicing a foreign company, it would be a Zero Rated VAT invoice, however if the local company pays the transport cost, then you invoice the local company.

In most cases, the recipient of the goods usually pays for the transport. The deciding factor, is which company invoices for the services. If a RSA transport company, and the client is in RSA, then it will include VAT, if the client pays the transport company directly. If the Sender quotes transport, and invoices you for the transport, then you pay no VAT on the transport, as the sender pays the transport company directly.

Just remember that when the goods crosses the border into RSA, then VAT is payable on the value of the goods, and on the import duty if any. In most cases this is paid directly to the clearing house that is used to clear the goods. Take note that the invoice from the clearing company, may have a large proportion of the invoice amount, allocated as VAT, and your accounting system, must accommodate this, and not calculate 14% VAT of the total invoice, as is normally the case on a VAT inclusive entry.