Customs & excise issues are a key part of any international business, but it is such a complex area, and very aggressively administered. But, don’t be scared, today, our Customs specialist, Wian de Bruyn, takes us through ten key questions to consider to ensure you don’t get in trouble.

  1. Are your Customs registrations up to date with SARS? Are your current import and export registrations and rebate store details still the same as your initial registration with SARS? If not, update it accordingly to ensure compliance. If you have any dormant companies registered with SARS, ensure you de-register them with SARS in order to avoid unnecessary penalties and interest.
  2. Are you making use of customs cost savings opportunities on the importation of goods, manufacture/processing and subsequently exported? If you import customs dutiable components/raw materials used in a manufacturing/assembly process exclusively for export purposes, there is an upfront customs duty and import VAT savings opportunity available to make your business more competitive in these tough economic conditions.
  3. Are you importing from the EU? The Trade, Development and Cooperation Agreement (TDCA) with the EU, provides for preferential customs duty rates on importation in SA and vice versa. Ensure origin requirements and obtain EUR1 certificates to make use of this benefit now. Various conditions apply and compliance is critical to make use of the benefits.
  4. How accurate are your tariff subheadings? It is advisable that you review your tariff subheading library from time to time to ensure accuracy. The tariff classification of a product determines the amount of customs duty and import VAT payable on a shipment. The technical detail of your product may have changed over the years, and could now be in a different tariff subheading, so check today.
  5. Importation from related parties – do you have a valuation determination in place? To prevent unnecessary stops from SARS on customs valuation, it is recommended that you apply for a customs Valuation Determination Number (VDN) from SARS. If import prices declared on importation are at price length, SARS will issue a VDN to be inserted on SAD 500s. This action will prevent additional stops by SARS and unnecessary costs at ports.
  6. When last did you review your customs values declared on importation? It is recommended to periodically review your customs values declared in order to ensure all the costs and charges applicable to your import transaction are deducted or added as applicable. The customs duty and import VAT are payable on the customs values declared on an import transaction, therefore the accuracy of your customs values declared is critical from a cost point of view.
  7. Are you making retrospective year-end price adjustments on your imported goods? The Customs & Excise Act confirms that SARS should be notified of any debit or credit note passed on an import transaction within one month from the debit or credit notes dates. For example, if a debit note is passed, the direct effect will be an increase in the customs values declared on importation and it has a direct increase in customs duty and import VAT paid. The additional portion of customs duty and import VAT needs to be paid to SARS to avoid unnecessary penalties and interest.
  8. Supply chain analysis, do you know your customs duty and import VAT amounts paid per annum? Do you know you can request your import and export statistics from SARS? This information is very valuable as it provides you with the actual data on your import/export transactions. It, furthermore, provides you with information to identify transactions that you are not importing, somebody might use your customs code number for its own importation. The data is also useful to identify customs duty savings opportunities and confirmation of VAT numbers used on importation and exportation.
  9. Have you recently received a schedule from SARS on non-compliance? It is critical to follow the correct procedure when you receive a schedule from SARS. The formal steps need to be followed, i.e. request the reasons for the SARS findings, analyse the technical detail of the issue at hand, apply for an Internal Administrative Appeal (IAA) or proceed with the Alternative Dispute Resolution (ADR), where applicable.
  10. Are you importing dutiable goods not available in the Southern Customs Union (SACU)? Take action now, there are trade lobbying opportunities available with the International Trade Administration Commission of South Africa (ITAC) where you can actually apply for a reduction of the customs duty, the creation of a new eight-digit tariff subheading, or the creation of a specific rebate provision for your product in question. Alternatively, if you are manufacturing, a particular product in question and require tariff protection, you can apply for an increase of the customs duty for that specific product.

So much to think about customs and excise!  If we can help you navigate the minefield, contact us today.

Associated enterprises

How can we help?

How you structure your business is a critical question as you expand globally.  The right structure will protect your assets, improve your currency position, support your business operations, facilitate future business expansion and changes, and optimise your overall tax rate. Trying to unscramble a sub-optimal structure entered into in haste or without full consideration of relevant facts is complex and expensive, so it’s important to plan upfront.

Structuring an international business is both a science and an art – this is our specialist area of expertise. Regan van Rooy is an international tax and structuring advisory firm focussing on Africa. We have offices in South Africa, Mauritius and Ireland and we can help you with any international tax or structuring query.

Leave a Reply