1. Customs requirements for exports
Customs requirements for exports
October 2017

2. Customs & Excise Commissioner and his powers Importation of goods
Compliance
Registration requirements
Tariff Classification and determination of duty
Customs valuation
Document completion and retention
Participation in incentive available
Free Trade Agreements / Country of Origin
October 2017
Customs Training

3. Commissioner and his powers
Officer
In its drive to ensure compliance the Commissioner of the South African Revenue Service (SARS) is determined to clean up the “Customs Industry” of all misconduct and fraudulent activities associated with it.
In order to achieve this, various aspects in Customs and Excise had to be evaluated with a view to change:
The structure, which includes teaming;
The development of new procedures; and
The amendment of the Act and Rules.
Customs Training
October 2017

4. Importation of goods Deemed imported
Importer of record / registered imported
Responsibility
Provide accurate import documentation to clearing agent -
Supplier’s invoices
Country of Origin Certificates (where applicable)
Packing lists (if available)
Transport documents
Clearing instructions)
Consider Import Control (ITAC)
Consider Letters of Approval (SABS)
Correctly enter (declare) goods on importation
Customs Training
October 2017

5. Importation of goods Declare correct reason / purpose for import:
Goods may be entered into the Republic and declared in accordance with one of the following procedures:
Home Consumption: Duty paid* / General Rebate / Industrial Rebate;
Warehousing (Bond Store): pending payment of duty or re-export
Transit / in bond movements within the country or through South Africa beyond the borders of SACU;
Temporary Admission into SACU including inward processing (for manufacturing purposes and subsequent exportation).
* free is also a rate of duty
Customs Training
October 2017

6. Registration requirements
All importers and exporters in South Africa are required to register with customs at the South African Revenue Service (SARS).
Please note that certain goods will require an import permit, which must be produced at the time of clearance.
Application for import permits must be made to the International Trade Administration Commission (ITAC).
Customs Training
June 2016

7. Customs activities and registration requirements
Importer
Exporter
Foreign entity (importer / exporter)
Incentive schemes
Bond Stores
Rebate
Import / Export incentives
Deferment accounts
Free Trade Agreements
SADC
EU / EFTA
AGOA
Clearing and Forwarding Agent
Customs Training
October 2017

8. Tariff Classification and determination of duty
Classify commodities on Customs declarations according to an appropriate tariff heading.
Tariff classification code directly linked to the rate of duty
Classification operates as part of the International Harmonised Commodity and Coding System
VAT & Customs Training
June 2016

9. Tariff Classification
Document requirements
Import invoice considered to be a declaration of goods shipped
Description of goods - import invoice must be accurate and correct
Declare correct Tariff Heading on declaration at time of importation
Importance of classification
Rate of Duty
Import/Export Permit
Prohibited and restricted imports/exports
Free Trade Agreements
Contravention of the Act (i.e. costs normally not recoverable)
Penalties – between 10% and 300%
forfeiture – between 25% and 100%
Vat Penalty of 10%
Interest

10. Customs Valuation
Customs Valuation in South Africa is based on the GATT Valuation Agreement
The GATT Valuation Agreement is implemented by the Customs and Excise Act No. 91 of 1964.
The primary basis for Customs Value is the “transaction value”
The transaction value is based on the total price paid or payable
Sections 65 and 66 of the Act relate to the transaction value of goods
Section 67 of the Act relate to cost elements that may influence the value for customs purposes
Customs Training
October 2017

11. Elements influencing the value for customs purposes at time of importation
Proceeds
Warranty
Transfer Pricing
Adjustments
Marketing
Advertising
Packaging
Transport
Policy
Export Transaction
Seller
Shipper
Related Supplier
Consignor
Exporter
Import Transaction
Buyer
Consignee
Agent
Importer
Assists TM IP
Commission
Distribution
Agreements
Royalties / Licensing
fees
Customs Training
October 2017

12. Customs Valuation Document requirements
Import invoice considered to be a declaration of value
Price of goods and related costs shown on the invoice must be accurate and correct
Declare correct value for customs purposes at time of importation
Importance of Valuation
Calculate correct duty and VAT
Transfer Pricing Adjustments
Retrospective TP Adjustments
True up / true down adjustments require disclosure to SARS
VAT penalty of 10% and interest
Contravention of the Act (i.e. costs normally not recoverable)
Penalties – between 10% and 300%
forfeiture – between 25% and 100%
VAT Penalty of 10%
Interest

13. Document completion and retention – Sea and Air
In terms of the Customs Act, Rules and Policies the following critical documents are required:
SAD500;
SARS release notification;
Customs Worksheet;
Supplier’s Invoice/Invoices;
Packing List/Lists;
Transport Document (Airway bill/Bill of lading); and
Other relevant documents i.e. permits and, origin certificates where applicable.
Supplying vendor is in possession of the zero-rated tax invoice, proof of payment and the trading licence of the qualifying purchaser.
Customs Training
October 2017

14. Document completion – Road Freight Exports
Same documents as required for Sea & Air Exports; and
Every vehicle must be accompanied with the following key document set:
A single Road Freight Manifest (RFM) listing all goods on board must accompany the vehicle at all times;
Bonded cargo, including International transit must also be accompanied by the DA 187 manifest and SAD 502 or SAD 505, respectively;
SAD 500 export declaration; and
CN 1 and CN 2 documents (strongly recommended to keep on record)
VAT & Customs Training
October 2017

15. Document Retention
Every client must keep for record purposes for a period of five (5) years:
Books, accounts and documents in respect of all transactions relating to the Rules for the purpose of any acquittal procedure; and
Any data related to such documents created by means of a computer.
The five (5) year period is calculated from the end of the calendar year in which the document was created, lodged or required. (Sections 101 and 101A)
Every client must produce such books, accounts and documents on demand.
Customs Training
October 2017

16. Voucher of Correction (VOC)
In terms of section 40 an exporter must adjust the Customs declaration on discovering that the declaration submitted to Customs:
Does not comply with section 39; or
Is invalid in terms of Section 40(1).
The Customs declaration must be adjusted by:
Voucher of Correction (VoC);
The cancelation of the Customs declaration and the replacement or substitution of a new declaration;
Such manner as Customs may prescribe.
When submitting a VOC that relates to a drawback the correct rebate item and Customs Procedural Code (CPC) must be referenced before the goods are exported from South Africa.
Customs Training
October 2017

17. Participation in Incentives
Bond Warehouses
Rebate Stores
Rebates
Drawbacks
Refunds
Export Incentives
FTAs
Contravention of the Act (i.e. costs normally not recoverable)
Penalties – between 10% and 300%
Forfeiture – between 25% and 100%
VAT Penalty of 10%
Interest
Importance of Incentives
Deferment of import duty and VAT
Rebate of import duties and VAT
Goods must be treated in terms of the provisions of the Act

18. Hot Topics SARS Accreditation Initiative
Compliance relating to incentive schemes –
Refunds
Drawbacks
FTA’s
Rebates
Bond Stores
IT14SD reconciliations
Transfer Pricing Adjustments
Proof of export (CN1 and CN 2)

19. The PwC Customs Compliance Framework
Introduction to Customs and Excise The PwC Customs Compliance Framework
The PwC Customs Compliance Framework
Registration, licensing and surety management
Tariff Classification and determination of duty liability
Inward, outward and other relief or deferment facilities
Valuation and supplier contract management
Information and Records Management
Monitoring of registrations and
licences
Determination of registration,
licensing and surety requirements
Assess and determine non-tariff barriers, duties, levies or controls
Determine customs or excise duty liability
Determine classification of goods in Harmonised
System
Manage and monitor use and
compliance with relief
mechanisms
Assess compliance requirements
for relief mechanisms
Determination of Relief
Mechanisms available
Assess and evaluate supplier relationships
Assess and evaluate supplier costs, charges and expenses
Assess and evaluate supplier or agent’s contracts
Align information and records management strategy with tax compliance requirements
Review and manage effective retention and maintenance of records
Analysis and review of surety
and guarantee limits
Customs Training
October 2017

20. Questions? Thank you
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