South Africa

Looking to take your business global and conquer new markets? As a South African exporter, you've got some great options when it comes to getting financial support for your export journey. Let's dive into how you can access those sweet, sweet export grants and subsidies!

The EMIA Scheme: Your Ticket to Export Success

The Export Marketing and Investment Assistance (EMIA) scheme, run by the Department of Trade, Industry and Competition (DTIC), is your go-to for export funding. This program aims to get more South African products and services out into the world and attract foreign investment. Here's what's on offer:

1. Funding for exhibiting at international trade shows
2. Assistance with primary market research in foreign countries
3. Grants for bringing potential foreign buyers to South Africa
4. Sector-specific funding for industry associations and export councils

Are You Eligible? Check the Criteria

To qualify for EMIA funding, your business needs to meet some key criteria:

• Be a registered South African manufacturer or exporter
• Have traded for at least one financial year (two for pavilions)
• Offer products with at least 35% local content or value-add
• Be tax-compliant and in good standing with SARS
• Submit your application to the DTIC 2-6 months before your event

There are also some limitations to keep in mind, like a cap of 4 individual grants per year and only funding one company rep per event.

Individual Grants: Fly Solo and Shine

If you're keen to venture out on your own, individual EMIA grants have got you covered:

• Individual Exhibitions: Get funding for exhibiting at recognized international trade shows, including stand costs, airfare, transport of samples, and marketing materials.
• Primary Market Research: Planning a trip to scope out a new export market or meet potential investors? This grant helps with airfare, accommodation, and transport costs.
• Individual Inward Missions: Invite foreign buyers or investors to visit your South African operations, with the EMIA covering their travel expenses.

Group Schemes: Strength in Numbers

For those who believe teamwork makes the dream work, EMIA's group offerings might be your jam:

• National Pavilions: Join forces with other South African companies at major international exhibitions, with shared costs and logistics.
• Outward Selling Missions: Participate in DTI-organized trade missions to target export markets.
• Inward Buying and Investment Missions: Welcome foreign buyers and investors to South Africa for a tour of local industry and B2B networking.

Sector-Specific Support: Niche Needs

If you're part of an industry association or export council, you can tap into funding from the Sector Specific Assistance Scheme (SSAS) for:

• Local and international exhibitions, pavilions and trade missions
• Marketing materials like brochures, websites and advertising
• Inward buyer and investment missions

How to Apply: Get Your Ducks in a Row

To give yourself the best shot at securing export funding, make sure you:

• Have a clear export marketing plan and budget
• Get your application in well before the event dates
• Provide all the required documents, like financials and SARS clearance
• Show how the funding will help grow your exports and create jobs

The DTIC has regional offices across SA to assist with the application process and answer any questions.

So there you have it - a whirlwind tour of the export funding landscape in South Africa. With some savvy planning and a compelling case, you could soon be jet-setting to new markets with government support. Go get 'em, export tigers!

Useful links:

• Export incentives summary: https://www.fincorp.co.za/export-incentives-south-africa/

If you're exporting goods from South Africa, it's important to understand how VAT works on those exports. The good news is, in most cases, you can export your goods without paying VAT and even reclaim some input VAT. Let's break it down.

Exports are Generally Zero-Rated for VAT

When you export goods from South Africa, those exports are usually "zero-rated" for VAT purposes. This means that VAT is charged at a rate of 0% on the goods you're exporting. Some examples:

• You're a clothing manufacturer in Joburg shipping t-shirts to a client in Europe
• You run a wine farm in the Cape Winelands and export a batch of Pinotage to the USA
• You make machinery in Durban that you sell to a company in Zambia

In these cases, you don't charge or collect any VAT from your overseas customers. Score!

Why Exports are Zero-Rated

So why does South Africa let exports go VAT-free? There are a few good reasons:

• It keeps SA exports competitive in international markets by not adding extra taxes
• It prevents double taxation, since the importing country will charge their own taxes
• Zero-rating exports is the international norm and aligns with SA's trading partners
• It encourages companies to export more by removing a tax burden

Direct vs Indirect Exports

Now, there are two different ways exports can work from a VAT perspective: direct and indirect exports.

Direct exports are when you as the supplier are responsible for delivering the goods to your overseas client, either yourself or by hiring a transport company. In this case, you can zero-rate the export, as long as:

• You export the goods through a designated commercial port within a certain timeframe
• You keep the required documentation as proof

Indirect exports are when your foreign customer collects the goods themselves or arranges their own transport out of SA. With indirect exports, you usually have to charge the standard 15% VAT, which your customer can then claim back from the VAT Refund Administrator (VRA).

However, you may be able to zero-rate an indirect export if you can prove the goods were delivered to a designated harbor or airport for export. It's up to you if you want to take on this risk though.

Reclaiming Input VAT

So that covers VAT on the exports themselves. But what about all the input VAT you incurred on your business expenses related to those exports? The great news is, you can usually deduct that input VAT from your output VAT and get a nice refund from SARS

To claim back input VAT on exports, you need to:

• Have the relevant tax invoices
• Keep the required export documentation as proof, like
• Customs documents
• Transport documents like air waybills or bills of lading
• Proof of payment from your overseas client
• Submit your VAT return to SARS within the appropriate period

If you used a transport company for a direct export, they need to give you an invoice and keep the customs paperwork to support your input VAT claim

Some Fine Print

As with anything tax-related, there are some important bits of fine print to keep in mind:

• There are time limits on when you need to export the goods and submit your documents to SARS to claim input VAT, so make sure you know the deadlines
• If you accidentally charged VAT on exports, you need to reimburse your customer and submit corrections to SARS to avoid penalties
• Certain exports, like some services provided to foreign clients, may have special rules, so double check if you're not sure
• Direct and indirect export rules also apply to sales from customs-controlled warehouses

The Bottom Line

In summary, most goods exported from South Africa are zero-rated for VAT, whether through direct or indirect exports. You generally don't charge VAT on exports, and you can reclaim input VAT on your related expenses.

Just make sure you follow all the requirements for documentation, timelines, and designated ports. When in doubt, chat with a tax professional to make sure you're ticking all the right boxes.

Now go forth and conquer those international markets!

Useful links:

• SARS guide on VAT and exports: https://www.sars.gov.za/wp-content/uploads/Ops/Guides/LAPD-VAT-G02-VAT-404-Guide-for-Vendors.pdf
• VAT refunds for tourists and foreign businesses: https://www.sars.gov.za/types-of-tax/value-added-tax/vat-refunds-for-tourists-and-foreign-enterprises/
• VAT Refund Administrator (VRA) site for refund claims: https://www.taxrefunds.co.za/
• National Treasury page on VAT: http://www.treasury.gov.za/publications/tax%20statistics/default.aspx
• SARS Customs & Excise page on exporting goods: https://www.sars.gov.za/customs-and-excise/exporting-goods-from-sa/