Export VAT zero-rating rules amended for South African ports

Businesses exporting goods from South Africa are set to benefit from a clarification to the country’s VAT export rules, particularly where goods are delivered to port and terminal operators.

National Treasury and the South African Revenue Service (SARS) have published amendments to the Export Regulations to allow certain movable goods to qualify for VAT zero-rating when they are delivered for export to terminal operators and port authorities.

The change addresses a practical problem that has emerged at some of South Africa’s busy ports, where the company physically operating a terminal may not be the same entity as the official port authority.

Why the rules needed clarification

Under the previous wording of the regulations, a vendor wanting to zero-rate an export had to follow specific procedures when goods were first delivered to a harbour.

This included delivering the goods to the port authority, the master of a ship, a container operator or an aircraft pilot, depending on the circumstances.

On paper, the requirement may have appeared straightforward. In practice, however, the distinction between a port authority and a terminal operator created difficulties.

National Treasury highlighted the Richards Bay Coal Terminal (RBCT) as an example.

RBCT operates privately within the Richards Bay harbour precinct, using infrastructure such as berths and channels provided by the Transnet National Port Authority (TNPA).

The complication was that the regulations appeared to require goods to be handed to TNPA to qualify for zero-rating, even though TNPA does not operate the coal terminal itself.

That left exporters facing a procedural hurdle that did not necessarily reflect how the port actually functions.

What the amendment means

The updated regulations are intended to address this gap by recognising situations where goods destined for export are delivered to qualifying terminal operators and port authorities.

For businesses moving goods through South Africa’s ports, the change could make the VAT treatment of exports more practical and better aligned with how modern port operations work.

The issue is particularly relevant to major export hubs such as Richards Bay, where private terminal operators work alongside public port infrastructure and authorities.

A change that reflects how ports really work

South Africa’s ports are complex ecosystems. A shipment can involve exporters, shipping companies, terminal operators, port authorities and other logistics providers before it leaves the country.

The amendment acknowledges that these roles do not always sit within the same organisation.

For exporters, the important takeaway is that the updated rules are designed to remove uncertainty around the delivery point used when applying the VAT zero-rating provisions.

The amendments were published by National Treasury under section 74(1), read with paragraph (d) of the definition of “exported” in section 1(1) of the Value-Added Tax Act, 1991 (Act 89 of 1991).

An accompanying Explanatory Memorandum has also been issued.

Where to find the new regulations

Businesses and tax practitioners dealing with exports can access the amended regulations and supporting documents through the National Treasury website.

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