I would like some assistance with a query that was raised by a client. This client (VAT vendor) will be purchasing a product from a South African company and selling it to a company in Angola. The purchase price includes all components, site inspection, labour / installation cost, and one year’s maintenance of the product in Angola.
The South African company is a VAT vendor and is charging a VAT inclusive price. VAT is being charged on the components and the labour.
The following queries have been raised, and I would like to be 100% sure of my facts before replying:
- Is my client able to reclaim ALL the VAT charged by the South African company?
- The invoice to the company in Angola will be in US$. Does my client have to charge VAT, or is this a zero-rated transaction?
I would also appreciate it if you can indicate any other points that you think I need to advise my client on.
Thanks and regards,
Here are my answers to your questions…
- Yes, your client can claim all input VAT charged by the South African company.
- This is an export and therefore a zero-rated supply. The invoice should reflect that VAT is charged at 0%.
Hope that helps!
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