Electronic services

The regulation prescribing electronic services for the purpose of the definition of “electronic services” in section 1(1) of the Value Added Tax Act 89 of 1991 (VAT Act) amends the definition to exclude any supplies of electronic services by a non-resident where such supplies are made solely to vendors that are registered in the Republic in terms of section 23 of the VAT Act.

This effectively introduces a business-to-business exclusion to bring South Africa in line with the globally accepted recommendations of the Organisation for Economic Co-operation and Development that such transactions should not be taxed.

The exclusion means that foreign suppliers who make supplies solely to South African customers who are registered vendors are no longer required to be registered for VAT in South Africa. However, the exclusion only applies where the foreign suppliers supply electronic services solely to VAT-registered South African customers. If they supply electronic services to customers who are vendors and non-vendors, the foreign suppliers will still be required to remain VAT registered and to account for VAT on supplies made to all South African customers.

The regulation also introduces new definitions of “content”, “internet” and “telecommunication services”.

The electronic services regulation comes into effect on 1 April 2025 and can be accessed here. 

Domestic reverse charge

The regulation regarding VAT on the domestic reverse charge (DRC) relating to valuable metal amends the definition of “valuable metal” to delete primary gold producers and contractors to primary gold producers from the exclusion of the definition.

The effect of the amendment is that primary gold producers such as gold mines, and contractors to such primary gold producers, are no longer excluded from the application of the DRC regulations, and they are now required to account for VAT on the supply of their gold containing material in accordance with the DRC regulation.

The amendment to the DRC regulation comes into effect on 1 April 2025 and can be accessed here.   

Casino table games of chance

The nature of betting transactions in the casino industry, particularly table games of chance, makes it difficult to track individual bets placed by punters and winnings paid. The regulation clarifies the manner in which casinos should account for VAT on bets placed and winnings paid in relation to table games of chance.

The regulation in relation to casino table games of chance came into effect on 1 January 2025 and can be accessed here.