South Africa Prepares Major VAT Reforms

• VAT and intermediaries: Proposed expansion allows intermediaries to account for VAT on supplies made on behalf of both foreign and local suppliers, increasing administrative responsibilities and clarifying compliance obligations for intermediaries.

• VAT on silver: Amendments will mirror gold export rules, simplifying documentary requirements for zero-rating silver exports while ensuring adequate reporting and record-keeping, reducing compliance complexity for South African silver suppliers.

• VAT on clinical trials: New section aims to zero-rate testing services and related goods supplied to non-resident clients, helping South African suppliers remain competitive internationally while simplifying VAT compliance on these services.

• VAT on education: Supplies by basic educational institutions will be VAT-exempt, requiring some schools to deregister and trigger change-in-use adjustments, while prior assessments before 1 January 2026 remain unaffected.

• VAT on foreign airtime vouchers: Only deemed distribution services within South Africa will attract VAT; airtime purchased for use abroad remains out-of-scope, clarifying cross-border consumption rules and reducing compliance risks.

• VAT on low-value imports: Removal of R500/R100 thresholds aims to level the playing field for domestic and offshore suppliers, ensuring VAT applies uniformly to low-value goods imported into South Africa.

• VAT renewal: VAT Modernisation Project introduces enhanced definitions, expanded ministerial powers, and foundations for voluntary e-Reporting, aiming to reduce errors, fraud, and manual compliance, improving efficiency and transparency in VAT administration.

Source: businesstech.co.za

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