New South African tax on Netflix and Internet services

Jamie McKane

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New South African tax on Netflix and Internet services

As reported by BusinessTech, the National Treasury recently published an amended regulation for electronic services.

The regulation – which has an effective date of 1 April 2019 – will impact international suppliers of services to South African customers, who must now evaluate whether their supply of services qualifies as ‘electronic services’ and whether this will create a liability to register for VAT in South Africa.
 

ThinkCentre

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This is going to be interesting to watch from the sideline! Any bets on how much money they will get?
 

Hummercellc

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How many online offerings are there in the world?
Millions I am sure, how will the government enforce this?
SARS can't even get their eFiling system up-to-date.
and we missed the digital migration deadlines a number of times.
And we won't have power to use the internet at the rate Eskom is going :ROFL:
 

ToxicBunny

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This is interesting in the extreme.

Part of me thinks Netflix will just tell SARS to ****, but the more rational part of me understands that they more than likely won't, and will just register for VAT and pass on the cost to the subscriber.

Similar for most large "electronic services" providers overseas.

We are a big enough market for them to care about the revenue...
 

whatwhat

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Hardly, many countries are investigating things like this.... the globalisation of the economy means a good number of countries are losing out on tax revenue that they otherwise used to see with local options.
Other countries have put this in place already. Heck even states in the USA are wanting an additional tax if you stream Netflix there.

My comment was more along the lines that this is seen as something new, when the rest of the world has been having it for a while already.
 

Praemon

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I thought this was already implemented? It certainly should've been by now. Europe and Australia already do it, so why not SA? Why should South African companies be disadvantaged by having to pay tax while international companies can sell their services into SA unhindered and have a clear price advantage?

Microsoft, Google, Apple, and so many other companies already pay tax in SA, and in fact I believe Netflix are registered or will be soon. Google is already registered for VAT in SA, and if you have a Google Apps account or purchase something off the Google Play store, they already charge 15% SA VAT. For some reason that hasn't applied yet to Ads or Cloud Services though. Ultimately this only affects the large corporates out there who already pay tax in other regions, so might as well contribute in SA too.
 
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R13...

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Hardly, many countries are investigating things like this.... the globalisation of the economy means a good number of countries are losing out on tax revenue that they otherwise used to see with local options.
Yes, many countries are doing this. Australia look to have started taxing them last year and NZ year before that.
 

Ianf1

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I wonder if I can claim the VAT back from Netflix, google and Amazon that they charge me? o_O
 

ToxicBunny

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Other countries have put this in place already. Heck even states in the USA are wanting an additional tax if you stream Netflix there.

My comment was more along the lines that this is seen as something new, when the rest of the world has been having it for a while already.
Well its new for this country.... and its not universal across the globe.
 

Vice

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The smell of Mono's influence. On the other hand, I suppose any tax that's used to the benefit of citizens is great; provided it's not embezzled.
 

Praemon

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I wonder if I can claim the VAT back from Netflix, google and Amazon that they charge me? o_O
If the service is used to make taxable supplies of goods and services for your business, then yes you can claim VAT back, just like with any other VAT vender.
 

Ianf1

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If the service is used to make taxable supplies of goods and services for your business, then yes you can claim VAT back, just like with any other VAT vender.
Sorry I was being facetious about the "reporting" on this. Google Netflix etc. have been charging VAT but the the so called expert makes out like this something new. Unless there is going to be a double VAT charge it is not new. Who actually does basic checks when quoting "experts"? I am sure Mybb use a lot more services than I do so would know that there is a VAT charge included from the big guys. I am not sure about the smaller players.
 

Solitude

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Bloody hell. If places stop selling to us South Africans because of this then it's the final straw and I will emigrate.

**** off you piece of **** government.
 
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