Guide

Exporting to South Africa

Taxes, duty and legal considerations when exporting to South Africa

Before you start exporting to South Africa, it's essential to find out about local rules and regulations on tax and duty in your intended market.

Start-up considerations
The business structures available in South Africa changed in 2011 when the New Companies Act was introduced. The available structures are now:

  • private company
  • sole proprietor
  • public company
  • partnership
  • business trust
  • non-profit organisation

The private company and sole proprietor are the most common structures for creating a business.

Legal considerations

South African business and legal systems are similar to those in the UK. Labour law is governed by various acts that provide a structure for businesses to operate in. You should familiarise yourself with labour acts before trading in South Africa.

Tax

If a company is incorporated in or managed from South Africa, it’s considered to be South African for tax purposes. The question of residency needs to be addressed to avoid double taxation.

In South Africa, the central government levies most direct and indirect taxes. The tax regime is set by the National Treasury and managed by the South African Revenue Services (SARS). SARS collects revenue, ensures compliance with tax laws and regulates and controls customs. The provincial governments and local authorities also have limited taxing rights.

Value Added Tax (VAT) is the principal source of indirect taxation revenue in South Africa. It’s based on the same principles in the UK and there are certain exemptions for VAT.

A vendor must register for VAT if the taxable supplies for a 12-month period have, or are forecast to exceed 1 million rand per annum. A vendor may also voluntarily register for VAT if the threshold of 50,000 rand has been exceeded in a 12-month period.

Other taxes include:

  • stamp duty
  • customs and excise duties
  • transfer duty
  • capital gains tax
  • skills development levy

When selling internationally there are different VAT rules depending on whether you are buying or selling goods or services within or outside the EU. Use our VAT rules when selling internationally tool.

Customs

South Africa has a complex import process. SARS defines approximately 90,000 product tariff codes that are strictly enforced on all imports. You are encouraged to use a reputable customs clearance agent familiar with South African convention.

Contact the Department for International Trade team in South Africa for a list of recommended agents.

Customs South Africa (Customs SA), a division of SARS, requires that you register with its office to get an importer’s code. This can potentially cause delays while clearing goods.

Import licenses are required for restricted items. You must have an import permit before the date of shipment. If you don’t, you may have to pay a penalty.

Work permits

If you start a new business, or invest in an existing business in South Africa, you must apply for a business permit. Work permits will only be issued if South African citizens with the required skills are not available.