VAT Guides Compliance & Technical

VAT Registration Requirements for eCommerce, Digital and SaaS Businesses

VAT Registration Requirements for eCommerce, Digital and SaaS Businesses



VAT registration can be a tricky process for new businesses, especially those that operate in different regions around the world. With the explosion of e-Commerce, digital and SaaS businesses, many governments have had to alter laws as the rules of worldwide digital tax start to change, and as we move to a global economy shaped by new businesses offering digital products and/or services. Let’s dig into three of these types of business, what to consider regarding their VAT registration requirements, and where to look to find the right information based on the needs of your own business.

What are eCommerce, Digital and SaaS Businesses?

e-Commerce businesses sell products over the internet. Some of the biggest eCommerce platforms include Amazon, TakeAlot and eBay. Digital businesses also sell digital products or services online, similarly to (Saas Software as a Service) businesses. What all these business types have in common, is that they use online technology to manage transactions with their clients. Advances in technology have led to an explosion of these types of businesses, giving rise to greater accessibility of services and goods to people from all walks of life, originating from all corners of the earth.

VAT Registration Requirements For Online Businesses 

If there is one thing to say about digital tax and VAT registration requirements for these types of businesses in 2019, it is that the rules are constantly changing. If you operate one of these business types, the changes will most certainly will affect you, possibly even in the country your are operating from, as well as in the country where you are making your predominant sales.

While we may do business across borders with great ease and speed, as a part of the teething process, a lot of different countries have different sets of rules. Start by isolation the regions you are selling in, and research local laws and requirements around company earning thresholds in order to be required to register for VAT. In a country like South Africa, for example, digital services are taxable, but only if the company earns in excess of R1 000 000 across a financial year. Start at home, and work your way out from there.



Getting Advice from the Right People

Once you’ve isolated the key regions of interest, it is important to get some advice from a tax specialist around a strategy for dealing with VAT registration, as well as taking into account your expected earnings in the forthcoming financial year. VAT Global, for example, offers simple and transparent VAT compliance solutions to international and EU companies. They thrive on dealing with the complexities of managing VAT, as well as other indirect tax obligations in over 40 jurisdictions. In 2020, it’s important to have a consultant in your corner, especially if you are growing and expanding, albeit a little unsure about some of the processes to remain compliant. Make sure your business isn’t left in the lurch in the process.

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While this article aims to provide an overview of the technicalities around VAT, it should not be considered a legal authority on the matter. You are encouraged to talk to a specialist if you need more information, or if you have specific questions about the processes mentioned.

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