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Get your tax invoices right for imported electronic supplies with these 7 requirements

by , 11 December 2015
When you import goods into South Africa, they pass through Customs where they collect VAT.

But SARS can't collect VAT for services that are imported via the internet.

The VAT Act states that VAT must be paid on imported services, and so SARS introduced new rules for the treatment of VAT around imported electronic services, which became effective as of the 1st April 2015.

What this means is that all suppliers of electronic services have to register as vendors in South Africa, and they must charge VAT if their supplies exceed R50 000 per year.

So when you receive supplies from an electronic service supplier, you must get hold of a tax invoice for those supplies.

Having said that, here are 7 requirements for a valid tax invoice when it comes to imported electronic services. In other words, the tax invoice must include the following 7 things...

Requirement#1:

The name, address and the VAT registration number of the electronic services provider.

Requirement#2:

Your company's name and address as the recipient of the supplies.
 
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Requirement#3:

An individual serialised number (an invoice number).

Requirement#4:

The date on which the supplier issued the tax invoice.

Requirement#5:

A description of the electronic services that the supplier supplies.

Requirements#6:

The consideration, in money, for the supply. This can be done in ZAR (Rands) or in any other country's currency.

If the consideration is in Rands, then the tax invoice must show the amount of the VAT charged, or it must have a statement that the amount includes VAT (and the rate at which it was charged).

If the consideration is in any other country's currency, then the tax invoice must show the amount charged in Rands. Or your supplier must give you a separate document which states the amount charged in Rands.

Requirement#7:

The exchange rate used.
 
*Do you want to learn more on imported electronic services? Then subscribe to the Practical VAT Loose Leaf Service today. 


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