Change of Vat rate on imports explained

With effect from  January 1, 2020, the rate of value added tax on standard rated goods was reduced from 15 percent to 14,5 percent.

What is the effect of the change on imported goods? If the goods being imported are subjected to value added tax in terms of the value added tax regulations they shall be subjected to value added tax at 14,5 percent at the time of importation.

VAT is charged on imported goods subject to the following conditions:

The goods being imported are liable to VAT in terms of the Value Added Tax General Regulations.

At the time of importation a bill of entry (Form 21) is used to clear the goods.

How is the VAT calculated on imported goods?

The customs duty is added to the value for duty purposes (VDP) to establish the value for tax purposes (VTP).

14,5 percent is then applied to the value for tax purposes to establish the value added tax payable.

The value for tax purposes on imported goods is calculated as follows:

Value for customs duty purposes	AAAA
Add Customs duty	BBBB
Value for Tax purposes	CCCC

VAT at 14,5 percent ( 14,5 percent X CCCC)

Is the value added tax paid on importation claimable on VAT return (VAT 7)

Any VAT paid at importation is claimable on VAT return provided the importer is a registered operator (RO).

A copy of the bill of entry on which the vat was charged is used as the tax invoice.

VAT on imported goods is claimable within one year from the date of importation.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer: This article was compiled by the Zimbabwe Revenue Authority for information purposes only. Zimra shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority. 

 

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