deweyzeph

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The biggest question that comes to mind is why? There is nothing SARS can do to make them comply with this money-grabbing law so why do they bother?
 

MagicDude4Eva

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Quite a large number of companies we deal with pretty much gave SARS the two-finger salute (with the whole "We are murican ya know?" excuse) - let's see how this plays out.
 

ToxicBunny

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Quite a large number of companies we deal with pretty much gave SARS the two-finger salute (with the whole "We are murican ya know?" excuse) - let's see how this plays out.

I expect most companies to do this to be honest, and we'll just go back to SARS asking us nicely to pay them the VAT directly which they will get a two-finger salute to anyway.
 

zippy

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The biggest question that comes to mind is why? There is nothing SARS can do to make them comply with this money-grabbing law so why do they bother?

If the company is operating in SA then there is a lot they can do. But if they are outside of SA then not much they can do to the company. Take the examples of the iTunes store.

It appears that VAT is payable based on the point of SUPPLY. Not where the end user lives or even where the customer makes the purchase.

The VAT that I pay for iTunes, even though I live in the UK, is Irish VAT at 23%

Note the distinction below between downloads and other purchases.
http://store.apple.com/uk/help/payments#tax

What VAT rate will I be charged?

Your Apple Store purchases will be taxed using the applicable VAT tax rate for your country. No intra-community purchases can be made on the Apple Store.

From 4 January 2011, the standard VAT rate for the UK will increase to 20 per cent.

Orders placed in the UK after 3rd January 2011 will be subject to a VAT rate of 20 per cent.

Orders placed before 4 January 2011 may be subject to one of the following conditions:
If your Order Confirmation email is sent to you and your order shipped before 4 January 2011, your order will not be subject to the VAT increase and VAT will be charged at 17.5 per cent. The 17.5 per cent VAT rate will be shown on your invoice.

If your Order Confirmation email is sent to you before 4 January 2011 but your order is shipped on or after this date, you will receive an invoice showing a VAT rate of 20 per cent. Don't worry, the order total has not been amended. The price shown in your order confirmation will be the amount charged. We will apply an additional discount to your order so the total amount of your order will be equal to the total amount stated in your Order Confirmation.

If your Order Confirmation email is sent to you after 03 January 2011, your order will be subject to the VAT increase and VAT will be charged at 20 per cent. While Apple makes every effort to confirm orders as quickly as possible, some orders are subject to reviews for your own security and confirmation can be delayed.

Why do I pay 23% VAT on Electronic Software Download orders and other products which are classified as services?

The VAT rate for Apple customers who purchase Electronic Software Downloads or other Apple products which are classified as services under EU VAT law will be 23% Irish VAT. This is because the place of supply of these products under EU VAT law is Ireland as the country from where Apple Distribution International makes these supplies.

In the case of Blizzard, I think is either France or Luxembourg ??

So this is why the SA iTunes store has charge SA VAT, because its point of supply is in SA.
 

zippy

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I expect most companies to do this to be honest, and we'll just go back to SARS asking us nicely to pay them the VAT directly which they will get a two-finger salute to anyway.

I doubt its anything to do with honesty. They can be subject to pretty hefty fines which are likely to exceed the VAT they should paid, not to mention the large lawyers bill. Its far easier for SA Revenue to take a big company to court than individuals.
 

ToxicBunny

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I doubt its anything to do with honesty. They can be subject to pretty hefty fines which are likely to exceed the VAT they should paid, not to mention the large lawyers bill. Its far easier for SA Revenue to take a big company to court than individuals.

Which court will they take them to? and how will the enforce the fine?
 

deweyzeph

Executive Member
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I doubt its anything to do with honesty. They can be subject to pretty hefty fines which are likely to exceed the VAT they should paid, not to mention the large lawyers bill. Its far easier for SA Revenue to take a big company to court than individuals.

SARS has no jurisdiction over foreign companies.
 

ToxicBunny

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Nope.

We're talking companies like Apple, Amazon etc..

They have no offices at all in SA.
 

ToxicBunny

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They do have jurisdiction over their subsidiaries which are registered in SA.

But also, a subsidiary is not liable for the tax bill.. they're different companies, they transaction did not happen through this subsidiary.
 
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