Introduction of the New Advance Payment Notice (APN) Process

Dear Valued Clients,

As your trusted partner in financial and accounting services, C2M Chartered Accounts is committed to keeping you well-informed about crucial developments that can impact your business operations. We are reaching out to you with an essential update from the South African Revenue Service (SARS) regarding a new mandatory process for importers of offshore goods.

Launch of the APN Process

Starting from 1 December 2023, SARS has implemented the Advance Payment Notice (APN) process for all importers. This is a critical change that will directly affect your transactions involving offshore goods.

Understanding APN

The APN is a unique reference number mandatory for making an advance foreign exchange payment exceeding R50,000 for goods to be imported into South Africa. This process is specifically relevant to Balance of Payment (BOP) category 101.

Purpose of the APN Process

This new system is designed to combat illicit financial flows and customs valuation fraud, which often arise from the misuse of advance foreign exchange payments for imported goods. It enables collaboration between the South African Reserve Bank (SARB), SARS, and authorised foreign exchange dealers, facilitating compliance for importers and allowing SARS to detect non-compliance.

Implications for You

As our client, this means you will need to log invoice details onto SARS e-filing for each transaction prior to making payment. SARS will issue a unique APN reference number for each payment via the eFiling platform. Registration with SARS as an eFiling user and importer is essential.

Payment Processing

Obtaining an APN reference number from SARS should be instantaneous, reducing potential delays. Remember, failing to provide this number when making an offshore payment may lead to processing delays and consequent shipment delays.

Cancellation and Customs Clearance

In case of payment cancellation, you’ll need to cancel the APN notice, which will automatically lapse if no payment is made within 30 days of issuance. The APN reference number must also be indicated on the import bill of entry for customs clearance.

Compliance and Documentation

Continued compliance with the Import Customs Clearance document submission is required within 4 months of your offshore payment. Discrepancies between these documents and the APN notice information can result in non-compliant status.

Key Points to Note

  • Keep your APN notice, invoice, and supporting documents secure, as SARS may conduct regular follow-ups.
  • From 1 December 2023, all importers are mandated to provide the related APN number for advance import payments.
  • The remitting bank must report the APN to the SARB and SARS upon payment conclusion.
  • Indicate the South African bank handling the advance payment when applying for an APN on eFiling.
  • APNs are not required for advance import payments into the Common Monetary Area (Eswatini, Lesotho, and Namibia).

Your compliance with these new regulations is crucial. C2M Chartered Accountants is here to assist you in navigating these changes smoothly. Please do not hesitate to contact us for any assistance or clarification.

Warm regards,

Arno Nel

Chartered Accountant (SA) RA