South Africa VAT on Electronic Services 2026: New Registration Threshold for Non-Resident Providers

South Africa is among the first African jurisdictions that have introduced a VAT framework for cross-border suppliers of digital services. The origins of the indirect tax regime specifically designated to tax overseas providers of digital services go back to 2014. 

The first significant adjustment of the initial version of the regulatory framework was processed during 2019, with the adoption of the Regulations on Electronic Services. These regulations defined that the overseas providers of electronic services or digital intermediaries that facilitate the provision of electronic services should register for VAT in South Africa if the taxable income surpasses the threshold of ZAR 1 million, calculated on the basis of 12 months. 

The overseas provider should register for VAT at the end of any month where the total of taxable supplies surpasses the threshold indicated above. The regulation came into force on April 1, 2019, so the first compulsory registration could already be processed during May. 

Registration Threshold 

The adoption of the Revenue Laws after the adoption of the Budget Act 2026 significantly changed the registration threshold and, as a result, reduced the number of registered persons. From April 1, 2026, the registration threshold is ZAR 2.3 million on a 12-month basis. 

The voluntary registration threshold applies when the taxable supply surpasses ZAR 120 000. 

South Africa VAT on Electronic Services 

The South African VAT on Electronic Services was initially developed to target B2C transactions. When it comes to B2B transactions, specific rules apply. In the cases when the foreign provider of electronic services makes exclusively B2B transactions with locally registered VAT businesses, the locally registered business should self-assess tax if the services aren’t acquired for tax purposes under the imported services regime. 

The country hasn’t developed a simplified registration and reporting system. In most of the instances, non-resident providers of electronic services should register for VAT in a standard manner, like local businesses, however, with one more requirement, and that is having a local representative.