Key takeaways
The South African Revenue Service (SARS) allows customs-registered clients to participate in the Customs deferment arrangement. This allows them to defer the payment of customs duty and VAT payable at the time of importation for a period of up to 30 calendar days.
Deferment accounts are payable within seven calendar days from the close of the deferment account period. In addition to the 12 regular payment dates agreed upon with SARS, there is a 13th payment each year, which becomes due by the end of SARS’ financial year. In terms of the SARS Deferment Guide, clients are required to make the additional payment for the financial year-end period and SARS must communicate the 13th payment date to deferment participants at least 30 calendar days before payment is required. This is to allow deferment account holders to plan accordingly. In the case of breach (e.g., full payment is not made on time) of the deferment agreement, the system will automatically suspend the client’s account.
Failure to comply results in the automatic suspension of the deferment account. If the full amount is not settled by the payment date, this will reflect on the monthly Customs Statement of Account (CSA) which serves as a notice to suspend or cancel the deferment account. In these circumstances, the account holder must, within seven calendar days from the issuing of the CSA:
- Submit representations to SARS to motivate why it must not be penalised, suspended, or cancelled.
- Pay the amounts due which are not under dispute.
- If there are no grounds for mitigating circumstances:
- For the first default, the account holder will be suspended from the deferment arrangement for a period of one month from the CSA closing date.
- For the second default, the account holder will be suspended from the deferment arrangement for a period of two months from the CSA closing date.
- For the third default, the deferment account will be cancelled. In this instance, the client may not be reinstated on the deferment arrangement and may only submit a new application after a minimum period of 12 calendar months has elapsed. The Certificate of Approval to partake in the deferment scheme would also be required to be returned to SARS Customs within three working days from the date of receipt of the notification of cancellation.
If you have any queries in this regard, please contact the Johannesburg Tax team for assistance and advice.
