VAT Treatment of Electronic Services in South Africa: Impact on Non-Resident Suppliers

• South Africa has adopted legislation to subject certain limited services supplied via electronic means to VAT
• The current regulations have significantly broadened the concept of “electronic services” subject to VAT
• Non-resident persons supplying services to residents via the internet must register for VAT and levy VAT if the value of services exceeds ZAR 1 million in a 12 month period
• Unlike B2C transactions, in B2B transactions, there is unlikely to be any additional revenue collected for South Africa from VAT registration of non-resident suppliers
• SARS has been approaching non-resident taxpayers with B2B business models to advise them of the mandatory obligation to register for VAT
• Applications for registration have yielded a registration date of 1 October 2019, six months after the 2019 Regulations came into effect

Source: mondaq.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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