Under measures in the budget 2018 and a draft regulation, the scope of taxable electronic services supplied by foreign suppliers would be broadened.
The draft regulation issued by the South African Revenue Service is relatively brief. Only two exclusions from value added tax (VAT) would be allowed—one for educational services provided by a person that is regulated by an educational authority in an export country, and the other for the supply of telecommunications services (as defined in the regulation). At this time, there is no indication that the regulation would not apply to business-to-business (B2B) supplies.
There may also be a further expansion of VAT with respect to services supplied by intermediaries and so-called “platforms.”
The intended effective date is 1 October 2018.
SARS requested comments on the draft regulation be provided by 22 March 2018. It is expected that comments would address items such as the administrative burden, particularly in relation to B2B supplies, and the implications for inter-group supplies.
Read a March 2018 report [PDF 219 KB] prepared by the KPMG member firm in South Africa
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