Further amendments to VAT e-services regulations input into force

by Marie Rodriguez

Revised policies clarifying the e-services supplied using foreign suppliers to South African clients concerned with price delivered tax (VAT) have been proposed in 2018, which notably broadened the scope of e-services. In the 2019 Budget Review, the minister of finance introduced similar amendments to the e-offering policies to deal with sure oversights. On 18 March 2019, the revised very last policies were published in the Government Gazette, prescribing what constitutes ‘electronic services’ as contemplated inside the VAT Act. The revised rules went into effect on 1 April 2019.

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South Africa no longer has any location-of-deliver guidelines to aid within the willpower of which jurisdiction has taxing rights in recognizing elements made by overseas providers to South African customers. South Africa consequently delivered regulation supplying an area-of-deliver rule unique to e-trade transactions for the first time with impact from 1 June 2014, which required overseas e-services providers to sign up as VAT vendors in South Africa.

Entry necessities

Foreign providers of e-services are deemed to be sporting on an agency in South Africa if at least one of the following requirements is met:

The recipient of the services is a South African resident;

The payment for services originates from a South African financial institution account, or The recipient has an enterprise, residential,,, or postal address in South Africa. Foreign suppliers of e-offerings will be required to register as VAT carriers in South Africa to the quantity they make taxable supplies of e-offerings in extra of the VAT registration threshold. With effect from 1 April 2019, the registration threshold for supplies of e-services has accelerated from R50,000 in 12 months to R1 million.

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