INDIRECT / VAT TAX PERSPECTIVES: AN OVERVIEW

OF IMPORT/EXPORT

KEY CONCEPTS

IMPORT:

AN IMPORT IS A TANGIBLE GOOD BROUGHT INTO A JURISDICTION, ESPECIALLY ACROSS A NATIONAL BORDER, FROM AN EXTERNAL SOURCE LOCATION.

IMPORT:

EXPORT:

EXPORT:

THE TERM EXPORT MEANS SHIPPING GOODS OUT OF THE PORT OF A COUNTRY.

WHERE IS THERE AN EXPORT

THERE WILL BE AN IMPORT

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TAX PERSPECTIVES?CLICK HERE.

IMPORTS: AN OVERVIEW

IMPORTS ARE TAXABLE ‘TRANSACTIONS’ FROM AN INDIRECT TAX PERSPECTIVE.

IMPORTS: AN OVERVIEW

IMPORT VAT (GST) AND DUTIES (CUSTOMS DUTIES AND EXCISE DUTIES) ARE OFTEN APPLICABLE.

IMPORTS: AN OVERVIEW

DUTIES ARE ADDITIONAL TAXES LEVIED GENERALLY ON AN AD VALOREM BASIS.

IMPORTS: AN OVERVIEW

LIABILITIES MUST BE REMITTED DIRECTLY OR INDIRECTLY BEFORE GOODS CAN CLEAR CUSTOMS INTO FREE CIRCULATION.

IMPORTS: AN OVERVIEW

EXPORTS: AN OVERVIEW

EXPORTS: AN OVERVIEW

EXPORTS ARE GENERALLY NOT SUBJECT TO THE LEVYING OF TAXES EXCEPT IN COUNTRY / PRODUCT SPECIFIC SITUATIONS.

EXPORTS: AN OVERVIEW

FOR INDIRECT TAX PURPOSES (VAT / GST), EXPORTS ARE OFTEN DEEMED TAXABLE, BUT AT A RATE OF 0% (SUBJECT TO CONDITIONS).

EXPORTS: AN OVERVIEW

THE EXPORTER OF RECORD IS RESPONSIBLE FOR OBTAINING EXPORT CLEARANCE AND FOR COMPLYING WITH EXPORT REGULATIONS.

ADMINISTRATIVE CONSIDERATIONS

IMPORTERS NEED TO HAVE THE APPROPRIATE LICENSE / REGISTRATION IN PLACE BEFORE THEY

CAN ACT AS IMPORTER OF RECORD.

EXPORTERS MAY ALSO REQUIRE A LICENSE WHICH IS GENERALLY DETERMINED BY THE

NATURE OF THE GOODS EXPORTED, DESTINATION, AND END USE OF GOODS.

FREIGHT AGENTS WILL OFTEN REMIT THE IMPORT VAT AND DUTY TO THE RELEVANT CUSTOMS AUTHORITY ON BEHALF OF THE

IMPORTER AND THEN SEEK REIMBURSEMENT FROM THE IMPORTER.

THE IMPORT VAT / DUTY IS ASSESSED ON THE DECLARED VALUE OF THE GOODS AT IMPORT.

THIS VALUE CAN BE BASED ON DIFFERENT CALCULATIONS, BUT THE TRANSACTION

VALUE IS THE COMMON METHOD.

SHIPMENTS MUST BE ACCOMPANIED BY COMMERCIAL INVOICES AND ARE DECLARED WITH

REFERENCE TO A COMMODITY CODE, WHICH IS USED TO APPLY THE CORRECT RATE OF DUTY.

‘INCOTERMS’ DEFINE WHO IS RESPONSIBLE AND LIABLE FOR RELATED COSTS IN RELATION

TO A SHIPMENT OF GOODS (E.G., DDP, FOB, EXWORKS ETC.).

THE LINK TO VAT/GST

VAT/GST IS LEVIED ON THE IMPORTATION OF GOODS.

IF THE IMPORT IS REQUIRED TO FULFIL AN ORDER / SALE, THE

PLACE OF SUPPLY FOR VAT / GST PURPOSES IS OFTEN

DETERMINED BY WHO ACTS AS IMPORTER OF RECORD.

IMPORT VAT / GST IS RECOVERABLE SUBJECT TO SPECIFIC CONDITIONS, WHICH INCLUDE THE BASIC VAT RECOVERY PRINCIPLES AS WELL AS SOME ADDITIONAL REQUIREMENTS.

THE SALE OF EXPORTED GOODS IS OFTEN ELIGIBLE

FOR A 0% TAX CHARGE, SUBJECT TO CONDITIONS,

WHICH MAINLY REQUIRE THE RETENTION OF SPECIFIC

DOCUMENTATION.

COMMON PITFALLSWHAT CAN GO WRONG?

THE IMPORTER HAS NO REGISTRATION OR LICENSE

GOODS WILL BE HELD AT CUSTOMS

INCORRECT ENTITY IS DECLARED ON

IMPORTER OF RECORD

IMPORT VAT IS IRRECOVERABLE

RELIEF IS SOUGHT AFTER THE IMPORT HAS BEEN CLEARED

RETROSPECTIVE ACTION CAN BE

TIME-CONSUMING AND DIFFICULT TO

IMPLEMENT

TEMPORARY IMPORT CONDITIONS HAVE

NOT BEEN MET

IMPORT VAT WILL BECOME DUE AS

SOON AS THE CONDITIONS ARE

NOT MET

EXPORT EVIDENCE NOT RETAINED

ZERO-RATE VAT POSITION NOT

SUPPORTED AND ASSESSMENTS

ISSUED BY AUTHORITIES

SUPPLY CHAIN STRUCTUREHOW ARE YOU GOING TO GET YOUR PRODUCT TO REMOTE MARKETS?

THE SUPPLY CHAIN STRUCTURE INCLUDES …

SUPPLY CHAIN STRUCTUREHOW ARE YOU GOING TO GET YOUR PRODUCT TO REMOTE MARKETS?

THE SUPPLY CHAIN STRUCTURE INCLUDES …

PLACE OF ORIGIN

SUPPLY CHAIN STRUCTUREHOW ARE YOU GOING TO GET YOUR PRODUCT TO REMOTE MARKETS?

THE SUPPLY CHAIN STRUCTURE INCLUDES …

PLACE OF ORIGIN

PLACE OF SHIPMENT

SUPPLY CHAIN STRUCTUREHOW ARE YOU GOING TO GET YOUR PRODUCT TO REMOTE MARKETS?

THE SUPPLY CHAIN STRUCTURE INCLUDES …

PLACE OF SHIPMENT

PLACE OF ORIGIN

PLACE OF DESTINATION

INEFFICIENCIES CAN ARISE AS SUPPLY CHAINS EVOLVE

AND BECOME MORE COMPLEX UNLESS DILIGENT PLANNING

IS UNDERTAKEN.

DO YOU KNOW …

WHERE THE INDIRECT TAX LIABILTIES ARE BEING TRIGGERED

AND WHO IS RESPONSIBLE FOR THOSE LIABILITIES?

DO YOU KNOW …

THE LOCATION OF WAREHOUSING AND DISTRIBUTIONS AND THE

INVOLVEMENT OF 3PLs, FULFILMENT HOUSES, AND RESELLERS?

LET US HELP YOUR BUSINESS MOVE INTO NEW MARKETS

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