Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislation
Effective from 1 June 2014, all foreign businesses supplying digital products such as mobile applications to be used in South Africa are required to register as vendors. This amendment was made to align South Africa with an international trend of bringing cross-border supplies of electronic services...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
AOSIS
2016-03-01
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| Series: | Journal of Economic and Financial Sciences |
| Subjects: | |
| Online Access: | https://jefjournal.org.za/index.php/jef/article/view/27 |
| _version_ | 1811328364690014208 |
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| author | Liza Coetzee Marisca Meiring |
| author_facet | Liza Coetzee Marisca Meiring |
| author_sort | Liza Coetzee |
| collection | DOAJ |
| description | Effective from 1 June 2014, all foreign businesses supplying digital products such as mobile applications to be used in South Africa are required to register as vendors. This amendment was made to align South Africa with an international trend of bringing cross-border supplies of electronic services into the Value-Added Tax regime. It effectively shifts the Value-Added Tax liability from the importer to the foreign supplier. The reverse-charge-mechanism resulted in an erosion of the tax base and placed local suppliers of digital services at a competitive disadvantage compared to foreign suppliers. This paper critically evaluates the amendment to the Value-Added Tax Act using a literature review. The aim is to determine to what extent the amendments address the shortcomings of the reverse-charge mechanism, are aligned with practices in the European Union and New Zealand and whether they comply with the principles of an effective tax system. |
| first_indexed | 2024-04-13T15:23:42Z |
| format | Article |
| id | doaj.art-c94c7c0be5234809ba864433590a0c3c |
| institution | Directory Open Access Journal |
| issn | 1995-7076 2312-2803 |
| language | English |
| last_indexed | 2024-04-13T15:23:42Z |
| publishDate | 2016-03-01 |
| publisher | AOSIS |
| record_format | Article |
| series | Journal of Economic and Financial Sciences |
| spelling | doaj.art-c94c7c0be5234809ba864433590a0c3c2022-12-22T02:41:34ZengAOSISJournal of Economic and Financial Sciences1995-70762312-28032016-03-0191284210.4102/jef.v9i1.2725Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislationLiza Coetzee0Marisca Meiring1University of PretoriaUniversity of PretoriaEffective from 1 June 2014, all foreign businesses supplying digital products such as mobile applications to be used in South Africa are required to register as vendors. This amendment was made to align South Africa with an international trend of bringing cross-border supplies of electronic services into the Value-Added Tax regime. It effectively shifts the Value-Added Tax liability from the importer to the foreign supplier. The reverse-charge-mechanism resulted in an erosion of the tax base and placed local suppliers of digital services at a competitive disadvantage compared to foreign suppliers. This paper critically evaluates the amendment to the Value-Added Tax Act using a literature review. The aim is to determine to what extent the amendments address the shortcomings of the reverse-charge mechanism, are aligned with practices in the European Union and New Zealand and whether they comply with the principles of an effective tax system.https://jefjournal.org.za/index.php/jef/article/view/27Digital productselectronic serviceselectronically supplied servicesimported servicesreverse-chargeValue-Added TaxVAT |
| spellingShingle | Liza Coetzee Marisca Meiring Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislation Journal of Economic and Financial Sciences Digital products electronic services electronically supplied services imported services reverse-charge Value-Added Tax VAT |
| title | Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislation |
| title_full | Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislation |
| title_fullStr | Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislation |
| title_full_unstemmed | Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislation |
| title_short | Value-added tax on imported electronic services: a critical evaluation of the newly enacted South Africa legislation |
| title_sort | value added tax on imported electronic services a critical evaluation of the newly enacted south africa legislation |
| topic | Digital products electronic services electronically supplied services imported services reverse-charge Value-Added Tax VAT |
| url | https://jefjournal.org.za/index.php/jef/article/view/27 |
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