Yes, Sars is eyeing that porn site

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Think carefully before you buy a subscription to a porn site in eastern Europe  the South African Revenue Service wants its VAT take.

Johannesburg - Think carefully before you buy a subscription to a porn site in eastern Europe – the South African Revenue Service wants its VAT take.

Tax authorities are catching up to the digital era as a new source of income.

From June, Sars wants VAT payments on all electronic services – and that’s everything from that online course you signed up for and the international newspaper electronic subscription you bought, to the paid access to porn sites on the other side of the world.

This applies “to any supply of electronic services in the course or furtherance of an enterprise carried on by a person from a place in an export country: (a) to a recipient that is a resident of the Republic; or (b) where any payment to that person in respect of such electronic services originates from a bank registered or authorised in terms of the Banks Act, 1990”, say the regulations.

The electronic sales which require VAT payments include educational services like online courses; online games and gambling; internet-based auctions; the online sales of e-books, audiovisual material, photos, screensavers, music, audio clips, jingles and ringtones; subscriptions to blogs, journals and newspapers; and social networking services.

In VAT payments, the seller is responsible for handing over the VAT to Sars.

Does this really mean that a service provider in another country will have to do this?

“Yes the foreign supplier will have to register as a VAT vendor,” said National Treasury spokesman Jabulani Sikhakhane.

It’s not yet clear how Sars will enforce this.

 

The Electronic Services Regulations take effect on June 1. - The Star

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