Summary
Summary
Botswana has implemented legislation requiring non-resident digital service providers to register, charge, collect, and remit VAT on remote services to local customers.
Under the current regulatory framework, Botswana has put in place all necessary legislation and technical requirements to require non-resident digital service providers to register, charge, collect, and remit VAT on remote services supplied to local customers.
Regulations concerning the implementation of the VAT on Remove Services framework were adopted on May 29, 2026. (VAT(Government Entities and Large Unregistered Persons) Regulations; and VAT(Remote Services) Regulations)
These regulations, which supplemented the VAT Act, have been the last piece of implementing legislation needed to ensure enforcement of the previously adopted Tax Amendment Act (October, 2025).
Botswana VAT on Digital Services
New Framework
Botswana VAT on Remote Services framework is established in alignment with the global best practices for taxing the emerging digital economy. After a few years of continuous development of the VAT regulatory framework, the system is ready, and non-resident digital service providers that make remote supplies to local customers should get familiar with the new rules.
The Value Added Tax (Amendment) Act, 2025, adopted by the Parliament in October, 2025, came into effect on June 1, 2026. This Amendment and the VAT Regulations that were adopted later, with immediate effect, provide the mechanism for the implementation of the special, simplified VAT reporting regime for digital service providers.
Timeline
For non-resident providers of remote services, there are three dates of pivotal importance for their VAT compliance. These are the following:
- Registration of non-resident providers of remote services commences on the 1st June 2026.
- Charging of VAT by non-resident suppliers of remote services commences on the 1st October 2026.
- VAT-registered taxable persons will start accounting for VAT on remote services under the reverse charge regime by August 1, 2026.
VAT Compliance for Non-Resident Digital Service Providers
A remote service shall be treated as supplied in Botswana when the service provider does not have a place of business in the country, and the service is supplied to a Botswana resident.
Registration
Non-resident digital service providers should register for VAT if any of the following is reached:
- If at the end of any period of 12 months or less, the total value of taxable supplies made exceeds the registration threshold of BWP 500,000, or
- At the beginning of any period of 12 months, if the expected total revenue of taxable supplies during that period will exceed the registration threshold.
Considering that the registration threshold is relatively low (around USD 36,000), many internationally oriented remote service providers are expected to surpass the threshold.
To underline one more time, non-resident suppliers of remote services should register starting from June 1, 2026; while Government entities and Large Unregistered Persons (annual turnover of BWP 1,000,000) will commence registration on 1 August 2026 for purposes of accounting for reverse charge VAT.
The simplified VAT registration framework is established through an online portal where the respective taxable person can submit a registration application for a TIN, open an online business account, and have full control over VAT filing management.
Place of Supply Rules
When it comes to the determination of the place of supply rules for the remote services, the recipient of the remote services shall be treated as resident in Botswana if at least two of the following factors are satisfied:
The recipient’s billing address;
The Internet Protocol address of the device used by the recipient or any other geo-location method;
The recipient’s bank account details, including the account the recipient uses for payment or the billing address held by the bank;
The mobile country code of the International Mobile Subscriber Identity (IMSI) stored on the Subscriber Identity Module (SIM) used by the recipient;
the location of the recipient’s fixed land line through which the service is supplied to the recipient;
or any other relevant information.
In the situation where the provider has established that the recipient of a supply is resident in Botswana, the provider shall treat the transaction as B2C. If the recipient has previously notified the supplier of his tax status, then the recipient shall be accountable for VAT under the reverse charge regime.
B2C Remote Services
Non-resident remote service providers that provide services to local consumers should charge, collect, and remit VAT at the rate of 14% on each B2C supply.
B2B Remote Services
As regards B2B supplies of remote services to local tax-registered persons, the resident taxable person should self-assess VAT and report it under the reverse charge mechanism.
Scope of digital services
The VAT on Remote Services Regulation defines remote services as services for which, at the time of the supply of the services, there is no necessary connection between the place where the services are physically performed by the supplier and the location of the recipient of the services.
Remote services are services supplied by non-resident suppliers to customers in Botswana through electronic means or over the internet. These include, but are not limited to:
- The online supply of e-books, music, games, apps, and software
- Streaming of audio, audiovisual content
- Podcasts and any form of digital content
- Website hosting, online data warehousing, file-sharing, and cloud storage services
- The supply of webinars or distance learning courses
- Professional services, such as legal, accounting, and consultancy services, that are provided remotely or performed physically in Botswana
- Remote service provided through an electronic marketplace
- Other similar services
Digital Marketplace
Deemed Supplier provision
The VAT Botswana Regulations define an electronic marketplace as an online marketplace through which the underlying supplier makes a supply of remote services to the customer who is a resident in the country. The electronic marketplace includes the following business model types: a website, internet portal, gateway, online store, distribution platform, or other similar marketplace or platform, and does not include a marketplace that solely processes payments.
The deemed supplier provision is part of the VAT framework on Remote Services in Botswana. The deemed supplier provision is triggered when the following conditions are met:
Pre-conditions ↓
- Marketplace operator is a foreign person without physical presence in the country
- Underlying supplier isn’t registered for VAT in Botswana; and
The Marketplace does the following:
- Authorises the charge to the recipient of the supply
- Authorises the delivery of the supply to the recipient of the supply,
- or sets the terms and conditions under which the supply is made;
- and the recipient of the supply is resident(non-taxable person) in Botswana and is not a registered person, a government entity, or a large unregistered person.
When the above conditions are met, the operator of the marketplace becomes accountable for VAT on the underlying supply of remote services.
VAT Declaration and Remittance
Non-resident remote service providers should file VAT returns online through the simplified VAT portal. The returns should be declared quarterly. Registered providers of remote services should submit a VAT return online, on or before the 25th day of the month following the end of the tax period.
A Government entity or large unregistered person shall submit a VAT declaration on remote services on a bi-monthly basis.
The remittance of the tax payable(or nil return)should be made within the same deadlines specified for the submission of the returns of different taxpayer categories.
Invoicing
A registered non-resident supplier of remote services that makes a B2B transaction should issue a tax invoice for each B2B transaction and store the necessary information accordingly.
Penalties
Late registration, late filing, and late payment may result in penalties, including fines, interest charges on unpaid VAT, and potential legal action.
Compliance Requirements
After registration, the non-resident supplier of remote services should align with the following VAT compliance requirements:
- Establishing accounting standards in accordance with the VAT Act, the Tax Administration Act, and the connected Regulations
- Submission of VAT returns, regardless of whether any tax is payable
- Payment of returns
- Issuance of sales tax receipts or tax invoices
- Prompt formal communication with the Tax Commissioner General about any relevant change to the person’s business information
How to Stay Compliant
The Botswana VAT regime for non-resident providers of digital services has been significantly reshaped with the latest amendment to the VAT Act. Starting from June, 1, 2026, non-resident digital service providers should register for VAT through the simplified VAT portal and duly fulfill their VAT-related obligations.
We have continuously followed the legislative updates concerning the introduction of the VAT regime for overseas providers of digital services.
The advisory role offered by 1stopVAT for these providers extends from understanding the threshold exposure for registration, accountability for VAT, assistance with the return preparation, and remittance of the owed tax.
Where we cannot manage your VAT requirements directly, we have a great network of local tax agents who will take care of this.
In addition to successfully managing your registration, we can offer additional services for digital service providers in Botswana, such as:
- Assistance with Tax Reporting
- Tax Advisory and Ongoing Tax Management
- Correspondence with Tax Authorities
Takeaway
Non-resident providers of digital services to customers in Botswana should note that the commencement of the new VAT regime on Remote Services started on June 1, 2026. Under the Botswana VAT on Remote Services regime, most of the B2C remote services supply falls within the scope of taxable activities.
Author: Aleksandar Delic
The VAT regime is structurally developed in accordance with the globally accepted best practices, relying entirely on the simplified registration and reporting framework for non-resident service providers.
Indirect Tax Manager E-Commerce
Frequently Asked Questions
Botswana’s new VAT regime for non-resident providers of remote services officially commenced on June 1, 2026. From this date, foreign providers can register for VAT through the simplified online portal. However, the obligation to start charging VAT on B2C remote services begins on October 1, 2026. This phased implementation gives businesses time to prepare their systems, billing processes, and compliance procedures.
A non-resident provider must register for VAT if its taxable supplies to Botswana residents exceed BWP 500,000 within a 12-month period, or if it expects to exceed that threshold in the next 12 months. Since this threshold is relatively low for international SaaS, streaming, e-learning, and cloud businesses, many providers may reach it quickly and should monitor their Botswana-linked revenue closely.
Botswana applies VAT broadly to remote services delivered through electronic means or without physical proximity. This includes software subscriptions, mobile apps, streaming services, podcasts, e-books, online gaming, webinars, cloud storage, website hosting, and digital marketplaces. Interestingly, even professional services such as legal, accounting, and consultancy services may fall into scope when supplied remotely or physically performed in Botswana.
Botswana uses a two-out-of-several evidence test to determine customer location. A supplier must verify at least two indicators such as the customer’s billing address, IP address, bank details, mobile SIM country code, fixed landline location, or other relevant geolocation evidence. This approach follows international best practices and places significant importance on recordkeeping and customer verification.
Yes. Botswana introduced deemed supplier rules for electronic marketplaces. If a foreign marketplace facilitates remote services for an unregistered underlying supplier and controls payment, delivery, or contract terms, the marketplace itself may become liable for VAT. This shifts compliance responsibility from the supplier to the platform, similar to EU and OECD marketplace tax models.
Yes, for B2B supplies specifically. VAT-registered non-resident suppliers must issue tax invoices for each B2B transaction and maintain the relevant documentation. For B2C transactions, proper sales receipts and supporting accounting records must also be maintained to comply with Botswana’s VAT Act and Tax Administration rules.
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