South Africa updates e-services VAT

South Africa has issued a draft update of the definition of digital services for VAT purposes.

Since June 2014, non-resident providers of electronic services have been liable to register and charge South African VAT on B2C and B2B transactions. The latter is unusual – most countries do not require a registration for business-to-business supplies; instead relying on the VAT reverse charge.

The new proposal, applicable from 1 October 2018, include the following amendments

• It has removed a number of e-services currently exempted from VAT. Effectively, only education e-services provided by foreign public bodies and telecoms services would be exempted from VAT
• Intermediaries and online platforms responsible for issuing invoices and collections on such supplies will be liable to register, too

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