All goods imported into South Africa are subject to 15% Value-Added Tax (VAT), in addition to any customs duty. Understanding how import VAT is calculated — and how to claim it back — is essential for managing your cash flow.
How Import VAT is Calculated
SARS calculates import VAT using the Added Tax Value (ATV), not just the customs value. The ATV includes a 10% uplift on the customs value (to account for transport and insurance), plus any customs duty.
Formula:
ATV = (Customs Value + 10% uplift) + Customs Duty
Import VAT = ATV × 15%
Note: The 10% uplift does not apply to goods originating from SACU/BELN countries (Botswana, Lesotho, eSwatini, Namibia).
Worked Example
| Component | Amount |
|---|---|
| CIF value (product + freight + insurance) | R100,000 |
| 10% uplift (for ATV calculation) | R10,000 |
| Customs duty (25%) | R25,000 |
| ATV (Added Tax Value) | R135,000 |
| Import VAT (15% of ATV) | R20,250 |
| Total payable to SARS | R45,250 |
Note: VAT is charged on the ATV — which includes the customs value, the 10% uplift, and the duty amount.
Customs Value for VAT Purposes
SARS calculates VAT on the CIF value (Cost, Insurance, Freight) — meaning:
- Product cost (as per commercial invoice)
- International freight (to South African port)
- Insurance costs
If you buy on FOB terms (Incoterms), your freight and insurance costs are added to the product price to determine the CIF value.
Claiming Back Import VAT
VAT-Registered Businesses
If your business is registered for VAT with SARS, you can claim back the import VAT as an input tax deduction on your next VAT return. This means the import VAT is effectively a cash flow cost, not a permanent expense.
To claim, you need:
- Customs clearance documents (SAD500 form)
- Proof of payment of import VAT
- Commercial invoice matching the customs entry
- Your business must be registered for customs AND VAT
Non-VAT-Registered Importers
If you're not VAT-registered, import VAT is a permanent cost. This applies to individuals and small businesses below the VAT registration threshold (currently R1 million annual turnover).
VAT Exemptions and Zero-Rated Imports
Certain goods are VAT-exempt or zero-rated:
| Category | VAT Rate | Examples |
|---|---|---|
| Basic foodstuffs | 0% | Brown bread, maize meal, rice, fresh fruit, vegetables |
| Agricultural inputs | 0% | Seeds, fertiliser, animal feed |
| Exports | 0% | Goods exported from SA |
| Certain medical | 0% | Some medical devices and medicine |
| Most imports | 15% | Everything else |
Impact on Cash Flow
For a VAT-registered business importing regularly:
| Scenario | Monthly Imports | Import VAT Paid | VAT Refund (next period) | Net Cash Impact |
|---|---|---|---|---|
| Small importer | R500,000 | R75,000+ | R75,000+ | Temporary |
| Medium importer | R2,000,000 | R300,000+ | R300,000+ | Significant |
| Large importer | R10,000,000 | R1,500,000+ | R1,500,000+ | Major |
Consider using bonded warehousing to defer both duty and VAT payments until goods are needed.
V & S Freight's Role
We calculate and process import VAT as part of every customs entry. We ensure correct valuation so you don't overpay — and provide documentation for your VAT claims.