South Africa VAT changes in 2013 budget – Amazon ebook VAT

The 2013 South African budget was published on 27 February 2013. Contrary to newspaper speculation, it did not include a rise in the 14% Value Added Tax rate. However, it did contain a number of measures around the VAT compliance regime. This includes requiring foreign sellers of digital books (e.g. Amazon), games or films to register for South African VAT.

The changes included:

• Additional VAT relief on bad debts
• Clarification of the foreign currency translation rules for invoices
• Additional provision of VAT zero rating on the exports
• The VAT registration process will be simplified
• Changes to the tax point rules for contingent services
• VAT input relief for the provision on board aeroplane entertainment (films, music, games)
• The provision of digital services (music, films etc) by foreign companies will trigger a South African VAT registration

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