Customs duties are applied to imported goods at a wide variety of rates. Given that Customs duty is a tax, it comes with a wide and very complex range of compliance requirements. South Africa is about to have its existing Customs legislation replaced with a brand new set of laws, which is significantly adding to the complexity.
Core customs principles
Tariff classification. All goods cleared through Customs have to be classified into one of around 7 500 tariff codes, as the tariff code drives the duty rate for that product. This process is the single largest cause of non-compliance for importers. There is, unfortunately, no easy way to rectify this problem as classification is complex and takes years to master. If you want to find out more, visit our page on tariff classification.
Valuation. Most goods cleared through Customs need to be allocated a value for duty purposes. This is the base that the duty will be calculated on and is closely monitored by SARS. For the most part this value is the arms-length price for the product, but this value becomes far more complex when the goods are bought from related parties. There are also certain types of transactions where value is difficult to calculate (for example goods shipped under warranty). If you want to find out more, visit our page on Customs valuation.
Origin. South Africa is currently a signatory to 2 trade agreements and is in the process of negotiating more agreements. Given that these agreements allows for lower duties than the norm, they also come with quite complex rules to identify origin. If these rules are not complied with, the duty benefit of the trade agreement cannot be accessed. If you want to find out more, visit our page on trade agreements and origin.
Customs disputes should be taken seriously.
If you currently have a dispute with SARS, get hold of us. We successfully deal with many Customs disputes and would love to see how we can help you.