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South Africa: Digital Services VAT and who needs to Register for it

As of 1st April 2020, South Africa will widen its definition of what constitutes a “Digital Service”, forcing many foreign digital businesses to register for VAT in South Africa, or else, they will risk non-compliance and penalties.

South Africa has extended the Digital Service VAT inclusion list from:
  • Internet-based auctions;
  • Online journals, blogs, newspapers, social media, webcasts, apps and web services;
  • Online media, music, e-books and images; and
  • Education, excluding those services provided and regulated by the education authorities.
to businesses that provide:
  • Online advertising;
  • Online consulting;
  • Online training;
  • Online gaming; and
  • Software subscriptions.

The VAT legislation still applies to companies that deliver these services both B2B and B2C.

However, South Africa has also raised the threshold for registration from ZAR 50,000 per annum to ZAR 1,000,000 (around $70,000).

If your business supplies the above mentioned Digital Services within South Africa, it’s worth making sure you’re 100% compliant. Vatglobal provides businesses with a fully outsourced solution to VAT registration and filing in South Africa.

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