Another Blow to the Google and Apple Online Stores in South Africa

LazyLion

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Despite having to already comply with silly South African censorship requirements from the FPB, now those foreign businesses who want to sell e-books, music and other digital goods will have to register as VAT vendors in South Africa.

http://www.sanews.gov.za/south-africa/2013-budget-speech

he Budget Review outlines various measures proposed to protect the tax base and limit the scope for tax leakage and avoidance. The taxation of trusts will come under review to control abuse; modifications are proposed to the tax treatment of employment share schemes and disability or income-protection policies; outstanding difficulties in the distinction between debt and equity will be addressed; and it is proposed that foreign businesses which sell e-books, music and other digital goods and services should be required to register as VAT vendors, in line with regulations which have been adopted by the European Union and other jurisdictions.

These hurdles do nothing more than stifle the growth of online retailers. :mad:
 

abandonallhope

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They make demands like the southern tip of the most backwards continent is such a super lucrative consumer electronics market.
 

JStrike

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Despite having to already comply with silly South African censorship requirements from the FPB, now those foreign businesses who want to sell e-books, music and other digital goods will have to register as VAT vendors in South Africa.

http://www.sanews.gov.za/south-africa/2013-budget-speech



These hurdles do nothing more than stifle the growth of online retailers. :mad:

Yeah....the same hurdles they face in Germany, France, Italy etc.
Must be tough on them
 

LazyLion

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Yeah....the same hurdles they face in Germany, France, Italy etc.
Must be tough on them

Those are much bigger and more lucrative markets.
But I forgive someone like you for completely failing to notice that obvious fact. :rolleyes:
 

DJ...

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Do local online retailers have to charge VAT?

If their turnover exceeds R1m p.a then yes. Otherwise, no they are under no obligation to register for VAT. Not sure why this rule is being instituted - it is quite pathetic...
 

SauRoNZA

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Uhm...this makes perfect sense to me.

Anyone selling anything as a business in this country need to charge VAT and therefore register for it. I don't see why Apple/Google/anyone should be exempt from charging/paying VAT.

It's the TAX laws of the country. They charge TAX in the US on all iTunes Apps...and they should do the same here.



However the FPB can **** right off.
 

JStrike

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Those are much bigger and more lucrative markets.
But I forgive someone like you for completely failing to notice that obvious fact. :rolleyes:

That is not the point.
If you want to accept customers from a country, you need to obey their laws.
And in many countries, VAT is legally required to be paid on transactions.
Apple and Google are not special.
If they want to do business with customers in SA, they must pay VAT. Why should local digital retailers pay tax and Apple and Google not?
 

DJ...

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Sounds fair to me then.

Well in that case you're about to call it unfair, because it is not required of all companies, contrary to popular opinion.

VAT registration is voluntary under a certain revenue threshold.

At the end of the day it is not the massive Apple and Googles that concernes me. It is the smaller, niche operators who will in no way be able to afford, or even manage this process...
 
F

Fudzy

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It is the smaller, niche operators who will in no way be able to afford, or even manage this process...

Like whom?

Not a jab or anything, just interested who the smaller distributors are.
 

KleinBoontjie

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They are taking all of South Africans money out of S. Africa................who is bringing it back?
 

DJ...

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That is not the point.
If you want to accept customers from a country, you need to obey their laws.
And in many countries, VAT is legally required to be paid on transactions.
Apple and Google are not special.
If they want to do business with customers in SA, they must pay VAT. Why should local digital retailers pay tax and Apple and Google not?

Because it is VAT, and at no point are the government involved in adding value in the supply chain. Other ancillary values derived from things like shipping, clearance, transport etc are already built into the costings or recovered through duties payments. There is no need for VAT payments tobe made. This is taking consumption alone and stripping away all of the other motives of VAT. It is quite pathetic imo...
 

DJ...

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Like whom?

Not a jab or anything, just interested who the smaller distributors are.

Labels are selling their music direct these days. Many, many labels. Companies like trackitdown consolidate music and sell it, and also have their own label division. Indie movies are not always available legally through any avenue but smaller distributors themselves.

Now they're subject to additional currency and interest rate risk dealing with SA, as well as having to quote higher prices if they want to officially feed the market. Therefore they withdraw operational support for the market. Gone is the potential investment in the economy, they'll simply let you handle the currency risk on your card instead..
 
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