Regulations were published in Government Gazette 37489 on 28 March 2014 (the 2014 Regulations) to introduce a very limited list of taxable services supplied by electronic means by non-residents to South African residents. These are referred to as “electronic services” and such supplies became taxable with effect from 1 June 2014. The Regulations on electronic services were subsequently amended, updated and published in Government Gazette 42316 of 18 March 2019 (the 2019 Regulations). The 2019 Regulations extended the scope of electronic services to any services provided by electronic means, subject to a few exclusions.
After the 2014 Regulations were introduced, SARS issued a number of VAT Rulings to certain non-resident suppliers of electronic services confirming the scope of taxable electronic services and whether the applicants were liable to register and account for VAT in South Africa or not. At the time of issue, those VAT Rulings may have indicated that the non-resident suppliers did not fall within the ambit of the 2014 Regulations. As the VAT law has now been amended including the introduction of the 2019 Regulations, it is important to note that such old VAT Rulings relating to the 2014 Regulations are no longer valid when considering the current law and can no longer be relied upon.
Under section 85 of the Tax Administration Act, 2011, read with section 41B, a VAT Ruling ceases to be effective if a provision of a Tax Act that was the subject of that ruling is repealed or amended in a manner that materially affects that ruling. The broadening of the scope of “electronic services” under the 2019 Regulations will therefore result in any VAT Ruling issued in respect of electronic services supplied before 1 April 2019, ceasing to be effective from 1 April 2019. Refer to VAT Connect 9 (February 2019), VAT Connect 10 (March 2020), the Frequently Asked Questions: Supplies of Electronic Services and the relevant Regulations for more details.
In order to register as a vendor, a non-resident supplier of electronic services is required to download the VAT101 application form and email the completed and signed form to [email protected]. Refer to the External Guide: Foreign Suppliers of Electronic Services as well as the External Guide: Guide for Completion of VAT Application for further details.
Source: gov.za
