Following the recent National Budget speech in South Africa, various proposals were tabled for consideration including a proposed amendment to the Electronic Services Regulation No. 37489, dated 28 March 2014.
Japan’s current JCT regime was established in 1989 – before the rise of the digital economy. Accordingly, the taxation of B2C supply of eservices by non-established companies to Japanese customers was not considered and currently these are not subject to JCT.
This provides an unfair advantage to non-established eservice providers compared to Japanese businesses in this field, which has become more apparent since the JCT rate increased form 5% to 8%, with another increase to 10% estimated from 1 October 2015.
The Advocate General (AG) released her opinion in the interesting VAT case dealing with the situation whether a foreign company can be regarded as having a fixed establishment in the supplier’s Member State by using the supplier’s infrastructure.
As previously reported here, the implementation of South African VAT on electronic services and associated obligation for non-resident businesses to register for VAT purposes in South Africa, has been delayed by 2 months and will be effective as of 1 June 2014.
PwC’s Indirect Tax Webcast series continues with a follow-up session of the latest developments in the South African legislation.
The presenter will be again Gerard Soverall, Tax Partner of PwC South Africa, who is specialised in e-commerce and cross-border indirect taxation.
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.
Two months have passed since our last VIES report two months; its time to take a look at how this very important site hosted by the European Commission has behaved in September and October 2013. The reasons why the VIES application is so important for ecommerce businesses are explained here.
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As reported there is new draft VAT legislation in South Africa, which is planned to be implemented in early 2014, which targets electronically supplied services provided by foreign (non-established) business to customers located in South Africa.
Whilst most of us are familiar with the rules and administrative practices which operate within the EU and Switzerland/Norway regarding the supply of such services by non-established businesses to private customers (B2C), it is important to recognize that South African VAT legislation does not currently distinguish as between B2B supplies and B2C supplies and refers generically to “imported services”. Thus whilst the intended “target” may well be the B2C sector it appears that the B2B sector may be equally impacted due to the absence of the distinction referred to above.
This article is again about one of the most frequently asked questions we are facing in our discussions with ebusinesses: What are “B2B” and what “B2C” clients?
The logical and expected explanation would be: B2B are all legal persons and B2C all natural persons / private individuals.
Unfortunately VAT follows its own logic – which is in most cases illogical when considered in everyday content. The above explanation therefore cannot be applied for VAT purposes.