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SARS provides clarity on the subject of collecting Vat from foreign e-commerce providers selling to South Africans

by , 11 March 2014
If you're not sure of how Vat is charged on e-commerce transactions you undertake with international product and service provides, we've got you covered. Here's what SARS says about this...

Here's what SARS has to say regarding the collection of Vat from FESPs selling to South Africans

Dr Anne Bardopoulos, Manager and Vat specialist at Deloitte says some long-awaited clarity has been provided by SARS on the much debated question of Vat being charged on e-commerce transactions undertaken by South Africans with international suppliers of products and services.

In a press statement, Dr Bardopoulos says that according to SARS, the registration process for foreign electronic service providers (FESPs) will be undertaken by a single, centralised unit.

The new registration application forms will be released shortly so that foreign electronic service providers can complete them and submit them by e-mail to a designated e-mail address, says Bardopoulos.

The designated e-mail address will be ready to receive applications from 1 April 2014, with processing beginning on 7 April. Thereafter, SARS says new applications will be processed within 72 hours of receipt. Notice that applications have been successful will be made by e-mail.


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Any person who is liable to register for Vat but fails to do so is guilty of an offence and may be liable to a fine or two years imprisonment.

Don't get caught out!

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Here are some of the key points regarding the collection of Vat from FESPs

SARS provided guidance on the issue during a workshop on 19 February.

This after SARS had invited comment on a draft regulation. The draft regulations listed the services provided by non-South African providers that'll qualify as electronically supplied services.

In the statement, Bardopoulos points out some of the key aspects raised in the workshop:

#1: FESPs won't be required to open and maintain a South African bank account in order to register for Vat. Provision of bank details will be optional and may include foreign bank account details;

#2: FESPs won't have to appoint a South African resident Vat representative. Suppliers will have to submit contact details of their public officer or contact person who is delegated to answer queries or provide information that SARS may require.

#3: Once registered, FESPs will have to register for eFiling so they can file Vat returns electronically and make appropriate payments through the system. FESPs will be issued a PRN number to enable Swift 103 payments to be set-up; and

#4: Vat returns will have to be submitted monthly.

Important: The draft regulation isn't meant to act as a guide; it's merely a list of qualifying electronically supplied services. We'll report on more information about who needs to register and how you need to do this once SARS publishes its e-commerce Vat registration guide.

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