Guide / Duty, VAT and the landed number
What it actually costs to land a machine in South Africa
The price on an overseas listing is the smallest number in the transaction. This is the order the rest of it arrives in, why VAT is charged on more than you paid, and which part of it you can claim back.
Five numbers, and only one of them is the machine
Landed cost is not one calculation but a sequence, and each step is worked out on the result of the one before it. Understanding the order is most of understanding the total.
Based on FOB, not on what you paid to get it here
South Africa values imports on the FOB price — the machine loaded at the port of export, before freight and insurance. Most countries use CIF, which includes those. Ours is the smaller base, which means duty is calculated on less. It converts to Rand at the customs rate of exchange for the day, not the rate you saw last week.
Decided by the tariff heading, not by the category
Duty is a percentage set against the specific tariff heading the machine falls under. A great deal of capital machinery comes in duty-free, but not all of it, and two machines that look similar can classify differently. Getting the heading right is genuinely skilled work and it is where a good clearing agent earns their fee.
The number VAT is actually charged on
Import VAT is not levied on your invoice. It is levied on the Added Tax Value: the customs value, plus a 10% uplift, plus any duty payable. That uplift catches people out because it looks like someone has added a charge. It is a standing feature of the South African calculation.
Large, and often refundable
Fifteen percent of the Added Tax Value. On a serious machine this is the biggest single line after the machine itself — and if you are a registered VAT vendor importing for use in your enterprise, it is generally claimable as input tax. Your real cost is then the landed figure less that line.
Clearing, wharfage, agency, storage
Port and clearing charges are modest against the machine but they are not nothing, and they grow if paperwork is wrong. Storage and demurrage accrue daily on a container that cannot be released, which is the real cost of a missing document.
Port to your gate
Inland transport is quoted on distance, mass and whether the load is abnormal. A machine that exceeds legal width or height needs permits and sometimes escorts, and that cost repeats every time you move it — which is worth knowing before you buy, not after.
How the steps stack up
The figures below exist only to show the order of operations. They are not a price, not an estimate, and not indicative of any machine.
| Step | What it is | Illustration only |
|---|---|---|
| Customs value | FOB price at the customs rate of exchange | 100 000 |
| Import duty | Per tariff heading — shown here as 0% | 0 |
| Added Tax Value | Customs value + 10% + duty | 110 000 |
| VAT | 15% of the Added Tax Value | 16 500 |
| Duty + VAT payable | What SARS collects at entry | 16 500 |
Freight, marine insurance, clearing, port charges and inland transport sit outside this table — they are real costs but they are not what duty and VAT are calculated on. If the duty rate on your machine is not zero, it enters at step two and increases step three, so it raises the VAT as well.
What buyers ask about duty
Is import duty charged on the freight as well?
South Africa bases the customs value on the FOB price — the machine at the port of export — rather than on the CIF price that includes freight and insurance. That is unusual internationally and it works in your favour, because duty is calculated on a smaller base.
Can I claim the import VAT back?
If you are a registered VAT vendor and the machine is for use in your enterprise, import VAT is generally claimable as input tax, provided you hold the customs release documentation in your own name. That makes your real cost the landed figure less the VAT line. If you are not registered, the VAT is a genuine cost.
Why is VAT charged on more than the machine cost?
Import VAT is levied on the Added Tax Value, not the invoice. That is the customs value plus a 10% uplift plus any duty payable. The uplift is a standing feature of the South African calculation, not a charge anyone is adding on.
Do I need my own importer's code?
For a commercial import in your own name, yes — you register with SARS. If you buy from us landed, we import and you buy locally, so you receive a machine and a tax invoice without needing one.