The benefits of a deferment account
With every import shipment SARS customs levies, duty and VAT are payable by the importer. Clearing the goods remains on hold until these taxes are paid. If the importer fails to pay within 7 days (for general shipments), the goods are detained in a State Warehouse where it incurs further storage costs and penalties.
For a trader who imports on a regular basis, managing these sporadic payments can become bothersome. However, if they have a customs deferment facility these payments can be made on account. The account may then be settled within 30 days of clearing (i.e. monthly) via e-filing.
Setting the deferment limits
An importer applying for a deferment facility must indicate the limit they require their account to have. Based on this, as well as the importer’s payment record, SARS will set an amount of surety (a bond) that the importer must provide. This surety guarantees SARS payment of outstanding duties and VAT if the importer should be unable to settle their account.
If the importer is ever in position where they have reached the limit of their deferment account, a cash payment for duties and VAT over and above what is covered by the account will be required to clear their goods. The limits of a deferment account can be amended, but with each application to amend the importer must register a new bond.
Failure to pay for outstanding deferred import tax means SARS may suspend the account, collect from the bond, and take the facility away from the importer.
Managing customs payments via your own deferment account means:
- Your shipments are cleared faster as there is no pause while customs waits for payment – a huge benefit in the case of shipments containing high-value goods.
- Your customs payment administration is reduced to one monthly lumpsum instead of a payment per shipment.
- As long as the deferment account can cover the cost of clearing, the shipment cannot be detained for unpaid import tax.
- Your process for taking imported goods out of bond is streamlined as the outstanding import tax may be added to the account.
- You may save on the finance fee charged by a clearing agent for using their deferment account.
You may use your deferment account to:
- Pay for general import duties.
- Pay for import levies and additional duties.
- Pay for import VAT.
- Pay duties and VAT due on imported goods that have been kept in a bonded warehouse.
- Collect SARS refunds of unpaid duties (in the form of a credit on the account).
- Make customs payment via a registered clearing agent, provided the agent has your certified power of attorney to do so.
Deferment accounts may not be used to:
- Pay duties and levies on locally manufactured goods i.e. excise tax.
- Pay export duties.
Clearing agents may use a deferment facility to pay duties and taxes on behalf of their clients. However, SARS strongly warns importers against giving another entity access to their deferment account. The account holder is ultimately responsible for settling outstanding payments after the goods are imported.
How to get a deferment account
Due to the risk SARS takes in allowing deferment, this facility is not available to new importers.
To be considered for a deferment account, you or your company must provide proof of income for at least three years, proof that your finances are in goods standing, and proof of regular customs compliant imports for at least one year.
A deferment account is specific to a port. If you import to, for example, sea ports in Durban and Cape Town, you’ll need an account in each location.
Entities who are most likely to get approval for deferment are large companies who import more than once in a 30-day period, clearing agents who handle imports for multiple clients, and regular importers who have never incurred customs penalties.
Want to apply for you Custom deferment account? Let us handle your application to make the process as quick and easy as possible.
About the author
Frieda-Marié de Jager
With a degree in design from CPUT, Frieda-Marié started her career in digital and content marketing in 2013. Since joining Import Export License in 2019, she’s created several e-books, guides, blog posts, and newsletters on international trade. On weekends you can find her building Lego with the family, walking her beagle, or whipping up a storm in the kitchen.