First SA digital tax collection emerges

[QuintonB]

First new digital tax for South Africans emerge

An international software vendor has informed its South African customers that it will begin collecting VAT from them

 

[Sodan]

OMG so it's really not a hoax!

 

[Toitjie]

So, in short, what does this mean for the end users?

 

[deweyzeph]

I don't understand why they bother complying. If they don't comply and carry on serving South African customers there's absolutely nothing SARS can do about it.

 

[Jacques]

One of the clever lawyers still has to explain how this Regulation has anything to do with the Act.

Where in the Act is the term "electronic services" mentioned? Or was the Act amended too?

The Government Notice says:

REGULATIONS PRESCRIBING ELECTRONIC SERVICES FOR THE PURPOSE
OF THE DEFINITION OF “ELECTRONIC SERVICES” IN SECTION 1 OF THE
VALUE-ADDED TAX ACT, 1991

...by virtue of the definition of
“electronic services” in section 1(1) of the Value-Added Tax Act, 1991 (Act No. 89 of
1991), hereby make the regulation set out in the Schedule hereto.

http://www.treasury.gov.za/public comments/E-services Regulation.pdf

Where is this "electronic services" mentioned in Section 1 or 1(1) ?

See 1.Definitions
http://www.acts.co.za/value-added-tax-act-1991/

 

[The_Ogre]

I don't understand why they bother complying. If they don't comply and carry on serving South African customers there's absolutely nothing SARS can do about it.

If I were them I'd just keep the VAT collected and not pay it over to SARS

 

[Fulcrum29]

Atlassian was asked whether their invoices would be in Rand or US Dollar, how collected VAT will be paid to National Treasury, and why they bothered complying with South African tax laws rather than cut us off.

A spokesperson for the company said that they “respectfully decline to comment on this topic.”

Interesting, so they will collect an additional 14% and when it comes down to "handing" it over to the SA treasury it is still a maybe... as in no comment.

 

[Rocket-Boy]

If I were them I'd just keep the VAT collected and not pay it over to SARS

Which is probably what they intend doing in the short term considering it has not been gazetted yet.

 

[MagicDude4Eva]

So your digital subscriptions (such as Amazon book purchases) will now also include VAT. Same applies if you are a seller on eBay. If you are running IT, you will pay VAT for Goole Apps, DNS, Cloudflare, hosted services such as Sendgrid, AWS/S3, Application monitoring and so on.

Atlassian has so far only commented with a non-sensical reply and is the only company I have dealt with where we received that type of communication. Others (I can not mention names - but some have big footprints overseas) have told me that they don't know about it and don't really care unless there are strict guidelines.

 

[The_Ogre]

So your digital subscriptions (such as Amazon book purchases) will now also include VAT. Same applies if you are a seller on eBay. If you are running IT, you will pay VAT for Goole Apps, DNS, Cloudflare, hosted services such as Sendgrid, AWS/S3, Application monitoring and so on.

Atlassian has so far only commented with a non-sensical reply and is the only company I have dealt with where we received that type of communication. Others (I can not mention names - but some have big footprints overseas) have told me that they don't know about it and don't really care unless there are strict guidelines.

This brings about the obvious question, HTF does SARS even think they'll be able to enforce this :wtf:

 

[JStrike]

This brings about the obvious question, HTF does SARS even think they'll be able to enforce this :wtf:

Same way any other law is enforced cross borders?

 

[The_Ogre]

Same way any other law is enforced cross borders?

Explain

 

[K3NS31]

Not cool

 

[Juice]

I don't understand why they bother complying. If they don't comply and carry on serving South African customers there's absolutely nothing SARS can do about it.

Government contracts?

 

[JStrike]

Explain

If they fail to pay the tax they owe, arrest warrants could be issued. And they could be extradited. But I speak under correction

 

[The_Ogre]

If they fail to pay the tax they owe, arrest warrants could be issued. And they could be extradited. But I speak under correction

Perhaps I should have been more clear. How would SARS know that you've bought something from Amazon.com, while you were "in" South Africa when you clicked the "buy" button? Remember, they cannot claim VAT for purchases made from another country. That's what I tried to point out really.

Its going to take an extraordinary effort on their part.

 

[Totempole]

I'm guessing that Steam games are gonna be hit with this too.

 

[MagicDude4Eva]

Perhaps I should have been more clear. How would SARS know that you've bought something from Amazon.com, while you were "in" South Africa when you clicked the "buy" button? Remember, they cannot claim VAT for purchases made from another country. That's what I tried to point out really.

Its going to take an extraordinary effort on their part.

I think they will just associate your billing country/credit card originating country to South Africa and then apply VAT. I doubt that neither Amazon, Apple or Google will comply with this - they make the whole EU already run in circles about their tax avoidance.

 

[JStrike]

I think they will just associate your billing country/credit card originating country to South Africa and then apply VAT. I doubt that neither Amazon, Apple or Google will comply with this - they make the whole EU already run in circles about their tax avoidance.

They comply quite happy with VAT regulation in each country in the EU. It is corporate profits where they start getting dodgy

 

[Paul Hjul]

One of the clever lawyers still has to explain how this Regulation has anything to do with the Act.

Where in the Act is the term "electronic services" mentioned? Or was the Act amended too?

There is an amendment to the Act on a Bill before Parliament. Not sure right now how far that has moved but the best of my knowledge there is a bit of a jump on the gun that could give rise to an illegality.