I want to start importing clothing items and selling it on my current website. I will definitely be importing more than twice per year. I want to find out what are the legal requirements? Should I register as an importer? Should I register a company or will a sole proprietory suffice? How will the custom duties be calculated? On my cost price of the clothing items or the market price in South Africa? I will appreciate any information.
There are actually three questions that require answering:
- Should I register as an importer?
Yes, registration is a legal requirement. Registration forms are available on the SARS website under the ‘Documents’ section.
On registration, you will be issued with a unique customs code which you will be required to record on all customs-specific documentation, e.g. the SAD 500 customs declaration form.
- Should I register a company or will a sole proprietory suffice?
It is not necessary to register a company to register as an importer. An individual can register as an importer.
How will the customs duties be calculated? On my cost price of the clothing items or the market price in South Africa?
Ad valorem (i.e. %) customs duties in Schedule 1 Part 1 of the South African Customs Tariff are paid on the “customs” or “transaction” value” as defined in Section 65 of the Customs Act of 1964 (as amended from time to time).
With a few exceptions, the “Customs” value is the FOB (free on board) value of the goods at the port of exit in the country of export. The exceptions to the FOB value are listed in Section 65. Note that the existing SA Customs Act will soon be replaced by two new Acts: the Customs Control Act and the Customs Duty Act, intended to modernise the country’s existing customs system.