New Transferwise 15% VAT - South Africa

RedViking

Nord of the South
Joined
Feb 23, 2012
Messages
34,937
From 31 March, 2021, we will start charging a mandatory 15% VAT (Value Added Tax) for South African residents.

Why is this happening?

There’s been a change to the local tax laws which affects foreign suppliers of digital services. This means we now have to charge VAT to those with an address in South Africa on every TransferWise fee that you pay.

What is VAT?

Value Added Tax (VAT) is a tax on the consumption of goods and services — it’s charged when you convert, spend or send money in any currency.

TransferWise does not benefit from charging VAT. We pay 100% of the VAT to the South African Revenue Service.

How will this change affect me?

The fee that you pay for a transfer will consist of two components — the TransferWise fee and the VAT charge, which is 15% of our initial fee.

Here’re some examples comparing old and new fees for sending money:



TransferOld feeNew fee
1000 GBP to EUR3.75 GBP4.31 GBP
1000 GBP to ZAR11.15 GBP12.82 GBP


At TransferWise, we always want you to know how much you pay. So, from 31 March, your tax invoice will show exactly how much VAT we charged for each transfer.
 

RedViking

Nord of the South
Joined
Feb 23, 2012
Messages
34,937
Just to clarify. This is on the transfer FEE.

Tax experts, can we claim back on this fee for provisional tax?
 

Sinbad

Honorary Master
Joined
Jun 5, 2006
Messages
75,928
Just to clarify. This is on the transfer FEE.

Tax experts, can we claim back on this fee for provisional tax?
The vat you can claim as input tax if you're vat registered.
The fee you could claim as a business cost if it's a genuine cost of doing business.
 

RedViking

Nord of the South
Joined
Feb 23, 2012
Messages
34,937
Another update:

From 19 February, we’re onboarding Bidvest Bank as our new partner to send ZAR transfers.

This means that when you send money via Exchange4Free, the payment will be processed by Bidvest Bank.

To keep receiving money, your recipients who have already filled and signed the SARB Mandate for 2021 will be required to sign it again. The next time you send them a payment, our partner will email them a pre-filled electronic Mandatory Reporting form.

Nothing else will change for your recipients. Your money will arrive one business day after they’ve completed and signed the form.

Recipients that haven’t filled and signed the form for this calendar year yet don’t need to worry. They’ll be requested to fill in the new form the next time you send them money.

If you have any questions, please get in touch. We’re happy to help.
 
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