Changes are expected from April 2019 concerning the taxation of electronic services in South Africa. All non-resident suppliers of e-services (if not specifically excluded from the revised regulations) will have a potential VAT registration liability in South Africa if the total value of their supplies exceeds R1 million (approx. 70’000 USD) in any twelve-month period.
For further details, please see the tax alert from PwC South Africa:
We are delighted to invite you to our next global indirect tax webcast :
South Africa: VAT on the supply of electronic services -proposed reforms
Date: 9 April 2018
Time 3pm BST, 10am Eastern
South Africa has proposed extensive reforms for electronic services supplies (“ESS”) which were announced in the draft electronic services Regulation on 21 February 2018. The draft regulation would repeal the current Regulation that sets out those services that are regarded as “electronic services”. The new Regulation if enacted will come into effect on 1 October 2018.
In this webcast we’ll focus on the following aspects:
The current electronic services Regulation
Proposed changes to the Regulation and a discussion on which services may now fall under ESS
Who is required to register and account for VAT in South Africa?: The concept of electronic agent, B2B/B2C distinction
We will also discuss other aspects that businesses need to consider including the VAT registration process and filing timeframes.
You will also be able to ask the panel questions during this live webcast.
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.
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.
As previously reported here, South Africa intends to impose VAT on electronic / digital services (“eservices”) supplied by non-established businesses to recipients in South Africa with effect from 1 April 2014.
At PwC’s upcoming Webcast Gerard Soverall (Partner, PwC South Africa), specialized in e-commerce and cross-boarder Indirect Taxation will provide an update on the latest developments. This session is designed to inform the participants of the content of the regulations and to discuss the administrative and enforcement challenges that may arise.
In line with the new VAT legislation, set to take effect on 1 April 2014, electronic/digital services (“eservices”) supplied by a business outside South Africa to a recipient in South Africa will require the supplier to register for Value-Added Tax in South Africa.
The recipient is deemed to be located in South Africa if:
that recipient is a resident of South Africa or
where payment originates from a bank registered or authorized in terms of South African law.
It is important to realize that this definition applies supplies made both to B2B (Business – to – Business) and B2C (Business – to – Consumer).
The introduction of VAT taxation of eservices provided by non-resident providers to residents of South Africa (both B2B and B2C) or paid for from a South Africa’s bank account has been postponed from the originally planned 1 January to 1 April 2014.
Further to our previous blog post, the South African Revenue Service (“SARS”) is planning to implement new VAT legislation which targets eservices provided by foreign (non-established) businesses to customers located in South Africa.
We have mentioned that at the end of August PwC South Africa was going to have a meeting with SARS and the National Treasury on this topic, in respect of which we are now pleased to provide you with an update. All parties agreed at the meeting that there are a number of issues that need to be addressed in respect of the proposed amendments. Nevertheless, there was consensus that the amendments need to proceed as a matter of priority, to ensure that there is no loss of tax revenue on these types of supplies, particularly as this is an area where trade is growing.
A few months ago we have started to monitor the up- and down-times of the VIES application (as explained in more details here). While VIES had its “ups and downs” in the past its performance has increased substantially in August. Find out more →