On 28 March the South African National Treasury published its “Electronic Services Regulations” in the Government Gazette and released a media statement, announcing a postponement of the effective date till June 1st, 2014.
The changes will make it compulsory for foreign e-commerce suppliers of electronic books, music and other digital services to register for VAT in South Africa.
The implementation date has been delayed with 2 months till June 1st, to give businesses more time to get their systems ready.
The Regulation provides guidance on what is meant by the definition of “electronic services” for VAT purposes in South Africa.
The most notable amendment to the draft regulation is the exclusion of:
1. “information system services”;
2. maintenance services; and
The draft Binding General Ruling (“BGR”) relating to electronic services was also released on Friday. The due date for comment is 31 May 2014.
This BGR sets out:
• the information that must be contained in a document in order for that document to qualify as a tax invoice; and
• the manner in which prices must be advertised or quoted,
for the supply of electronic services by an electronic services supplier.
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