New Binding General Ruling for Electronic Services
17 March 2016
SARS recently (23 February 2016) published issue 2 of VAT Binding General Ruling 28 (BGR 28), which clarifies the information that should be contained in a tax invoice, credit or debit note issued by foreign suppliers of electronic services and certain related issues.
A tax invoice issued by an electronic service supplier must contain the following as a minimum:
- Name and VAT number of the supplier;
- Name and address of the recipient;
- A serial number;
- Date of issue;
- Description of electronic services supplied;
- If invoiced in ZAR, the invoice must contain the VAT amount charged or a statement that VAT was charged and the rate at which VAT was levied;
- If invoiced in another currency, the amount in ZAR must either be reflected on the invoice or in a separate document reflecting the amount of VAT charged in ZAR; and
- The exchange rate used.
Credit and debit notes must contain, as a minimum, the information in (a), (b) (d) and (h) above together with:
- A brief explanation of the circumstances giving rise to the issue of the debit/credit note;
- If the credit or debit note is in ZAR, the increased/decreased consideration together with the increase/decrease in the VAT amount in ZAR and the rate at which VAT was levied; and
- If the credit or debit note is in another currency, the increased/decreased consideration together with the increased or decreased amount of VAT in ZAR must be either be reflected on the credit or debit note or in a separate document reflecting the increased or decreased amount of VAT in ZAR.
Electronic service providers must use the exchange rate published by SARB, Bloomberg or the European Central Bank on the date of supply, the exchange rate on the last day of the month preceding the time of supply, or the monthly average exchange rate of the month preceding the supply. If there is a distortion in the exchange rate, such as if there is a fluctuation in the foreign currency of 10% or more during the month preceding the time of supply, only the daily exchange rate may be used.
Electronic service providers may advertise and quote their prices exclusive of VAT on condition that their website contains a statement that VAT will be levied on the supply of electronic services.
BGR 28 applies until it is withdrawn or amended.