This has been causing waves since SARS stated its intentions of making electronic services subject to VAT last year. Now the final regulations have been published and are effective from 1 April 2019.
Of significance is the change in the definition of electronic services – in the original draft regulations e-services were specifically listed but the new definition is very wide – “any services supplied by means of an electronic agent, electronic communication or the internet for any consideration” (our emphasis).
Furthermore, the inclusion of business to business (B2B) supplies is a significant departure from the global trend to only include business to consumer (B2C) supplies as the former is an “in and out”, increasing the tax administrative cost rather than tax collections.
The exclusions from the definition are still –
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