SARS VAT guide is aimed at foreign electronic service suppliers, reflecting recent changes to the VAT Act.
The South African Revenue Service (SARS) has released an updated version of VAT-REG-02-G02: Supply of Electronic Services by Foreign Suppliers and Foreign Intermediaries guide, reflecting recent legislative amendments to the Value-Added Tax (VAT) Act. Queries related to this guide should be directed to the Large Business and International (LBI) service centre.
This announcement was made on 31 October 2025.
Key updates include:
Representative vendor rules
Sections 23(2)(a) and 46(2) of the VAT Act were amended (effective 24 December 2024) to allow a non-resident natural person to act as a representative vendor for a foreign supplier or intermediary of electronic services.
South African bank account exemption
A new proviso has been added to section 23(2) of the VAT Act stipulating that a foreign enterprise will not be required to open a South African (SA) bank account, provided that the enterprise resides in countries that have a Double Taxation Agreement (DTA) with SA in terms of section 108(2) of the Income Tax Act or section 75(2) of the VAT Act. However, section 23(2)(b) of the VAT Act shall not apply in the following circumstances:
- If a company is an “external company” defined in section 1 of the Companies Act (2008), and it does not have a fixed or permanent place of business in SA;
- If a natural person is physically present in SA for a period less than an accumulated period of six months in any period of 12 months;
- If the person is defined as an “enterprise” in terms of paragraph (b)(vi) of section 1 of the VAT Act.
Non-compliance conditions
Where the non-resident of SA no longer complies with the requirements of the provision to section 23(2B) of the VAT Act, normal rules for the representative vendor and banking details must apply with effect from the date of such non-compliance, where such date is after 24 December 2024.
Expanded definitions
The definition of “electronic services” was amended in section 1(1) of the VAT Act to include electronic agent, electronic communication, or internet. A new definition of “content” was added to section 1(1) of the VAT Act.
Refunds and VAT credits
The updates also highlight that a credit for a Foreign Supplier of Electronic Services will not be refunded; it is offset against future VAT liabilities. However, where a Foreign Supplier of Electronic Services is deregistering for VAT in SA, any credit will be refunded to the foreign bank account of that Foreign Supplier of Electronic Services.
