Key updates overview
SARS published VAT Connect Issue 19 (June 2025) summarising recent legislative changes, updated regulations, guidance documents and practical measures affecting VAT with effect from various dates in 2024–2025.
VAT rate decision
The Budget Speech proposed raising the standard VAT rate from 15% to 15.5% effective 1 May 2025 and to 16% on 1 April 2026, but the Minister of Finance later retracted the increase and proposed to keep the VAT rate at 15% from 1 May 2025, with SARS implementing the necessary system adjustments.
Recent legislative amendments (effective dates)
Several amendment Acts promulgated on 24 December 2024 amend the VAT Act and Regulations and generally take effect from 1 April 2025 unless stated otherwise, including Taxation Laws Amendment Act 42 of 2024, Tax Administration Laws Amendment Act 43 of 2024, Revenue Laws Second Amendment Act 44 of 2024, and Rates and Monetary Amounts Amendment Act 45 of 2024.
Notable VAT rule changes and clarifications
The definition of “resident of the Republic” was narrowed to exclude entities that are residents under income tax rules solely because their place of effective management is in South Africa where they do not carry on an enterprise in the Republic; amendments address cross-border leases of foreign-owned ships, aircraft, rolling stock and parts; foreign donor funded projects may consolidate VAT branches under specified conditions; Mudaraba returns are clarified as VAT-exempt; rules on irrecoverable debts recovered were tightened; timing for accounting for VAT on imported services was extended from 30 to 60 days; and relief and procedural changes were introduced for representative vendors and non-resident suppliers.
Electronic services and intermediaries
Electronic Services Regulations were updated and republished as Notice 5993, effective 1 April 2025, with new definitions (including “content”), clarifications for supplies between group companies, a B2B exclusion for supplies made from an export country to registered South African vendors, and an amendment to section 54(2B) allowing written agreements to treat supplies as made by the intermediary and creating joint and several liability for intermediary and principal where agreed.
Domestic Reverse Charge and casino rules
Amendments to the Domestic Reverse Charge Regulations for valuable metals came into effect from 1 April 2025 and removed a prior exclusion for holders or contracted persons, bringing those supplies within the DRC. New Casino Regulations determining VAT treatment for casino table games of chance were published as Notice No 5994, effective 1 January 2025, confirming the gross gaming revenue/net drop method and setting record‑keeping and VAT return reporting requirements for casinos.
Practical implications and guidance
SARS highlighted the change from the Refund Administrator to the VAT Refund Agency and provided contact details for the new body. SARS reminded taxpayers to beware of scams and phishing and published updated FAQs, guides and binding general rulings including VAT 404 (Guide for Vendors), VAT Reference Guide for Foreign Donor Funded Projects (Issue 3), VAT 420 (Guide for Motor Dealers) and several FAQ issues linked from the VAT Connect notice.
Source gov.za
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