South Africa VAT

Updated on May 19, 2022

What is VAT?

Value Added Tax (VAT) is the abbreviation of VAT. In general, VAT is charged on the sale of both products and services. It covers a wide range of products and services that are purchased and sold in South Africa for use or consumption. Because it is passed on to the final consumer, it is referred to as a consumption tax.

Who must pay VAT?

VAT is typically charged to the client by the business providing the products or services and collected from the customer at the end of the transaction. The provider then reports and remits the VAT collected to the tax authorities following the transaction.

There is no distinction between B2B and B2C transactions when it comes to cross-border transactions using electronic services (ESS) under current law (B2C). For example, Zoom is required to register for VAT in South Africa, which means it must account for and return VAT on all sales to South African clients. Consequently,

In the case of cross border transactions involving the supply of services not considered as ESS (e.g., Zoom Phone), the recipient is required to account for output tax on imported services to the extent the service is acquired for non-taxable purposes. Self-reporting for local VAT under the “reverse charge rule” resembles this.

Why am I being charged VAT?

Electronically Supplied Services (ESS) regulations in South Africa apply to Zoom’s video conferencing and telecommunication services (in the form of electronic communication services). Because of this, Zoom must collect South African VAT on all ESS deliveries to South African consumers.

What is a VAT registration number?

In South Africa, SARS assigns a 10-digit number, the first digit of which is always 4, to each registered VAT seller to identify them as such. All invoices above R5,000 must include the supplier’s and recipient’s VAT registration numbers (if the recipient is registered for VAT) (circa USD 290).

You should thus ensure that your VAT number is submitted in the Zoom billing system (see “How do I enter my VAT number”) so that your VAT number appears on invoices generated by Zoom.

How do I enter my VAT number?

Please follow these instructions to enter your South African VAT number:

Log on to Zoom’s website.
Select Account Management from the drop-down box, and then Billing.
The VAT Number can be edited in the Billing Contact section (which appears after the Billing Contact Address field).
When finished, click the Save button to save your South African VAT number.

Does Zoom have a VAT number?

We are registered with South Africa’s Value Added Tax (VAT). Your invoice will include Zoom’s South African VAT number.

How is Zoom determining which customers South African VAT applies to?

If a non-resident supplier makes ESS supplies to South African clients, Zoom will assess VAT in accordance with the place of supply laws. Zoom will charge and collect VAT on all supplies to clients in South Africa if two of the following conditions are met:

service recipients are South African citizens and/or have a business, residence, or postal address in South Africa, where payment is originating.

Will VAT apply if a South African company purchases Zoom for use in a location outside of South Africa?

Zoom will charge South African VAT on deliveries to a South African firm even if the application is utilised outside of South Africa if the place of supply conditions indicated above are followed.

Is there a minimum threshold purchase amount before VAT is applied?

To be clear, ESS sales to South African businesses and individuals are both subject to the country’s value added tax (VAT).

Are there any special exemptions applicable for charities under which VAT may not be charged?

No, South African VAT rules do not exempt ESS Zoom supplies to South African charities from paying VAT.

Will VAT apply even if a South African company provides a valid VAT number to Zoom?

For B2B and B2C customers in South Africa, Zoom will be charging VAT on all ESS purchases.

Are there any VAT obligations for me as a customer?

No, if you have VAT registered in South Africa and want to claim an input tax credit for the VAT paid to Zoom, you should at the very least preserve a copy of Zoom’s invoice.

What if I have a VAT number and forget to enter it?

Zoom’s billing interface allows you to update your VAT number at any moment. You’ll see the VAT number on your next invoice if you enter it correctly.