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Thread: Digital games tax proposed by SA government

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    Default Digital games tax proposed by SA government

    Digital games tax proposed by SA government

    SA finance minister proposes enforcing VAT on foreign digital download services

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    Assassin of Accountants Ike_009's Avatar
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    This is already in SA's VAT act, its just that its one of those taxes that individuals don't know about and don't care about paying.
    It will be interesting how SARS plans to monitor this. Especially people with american accounts.
    However I'm sure if you get a voucher to top up your account you should be in the clear for VAT purposes as I think SA resellers add VAT.
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    American accounts can't be monitored, I think. If push comes to shove and these players pull out from SA, you can always use a DNS or VPN service to register as an American user. And remember, Oregon and Delaware does not have sales tax, nudge, nudge, wink, wink.

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    Assassin of Accountants Ike_009's Avatar
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    Quote Originally Posted by Mister 44 View Post
    American accounts can't be monitored, I think. If push comes to shove and these players pull out from SA, you can always use a DNS or VPN service to register as an American user. And remember, Oregon and Delaware does not have sales tax, nudge, nudge, wink, wink.
    Jip, there is always a way round these digital platforms so I have no idea how SARS plans to catch gamers out.
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    Thread Killer Mk VIII czc's Avatar
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    I thought the VAT act prevented foreign companies from charging South Africans VAT.
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    Quote Originally Posted by czc View Post
    I thought the VAT act prevented foreign companies from charging South Africans VAT.
    Foreign companies don't charge VAT, but once the goods/service "arrives" in South Africa, you should be declaring/paying VAT yourself, since it's considered an "import". The problem is that no one really does, especially when it comes to digital goods, and that is why SARS is now shifting the responsibility from the tax payer to the companies, who are easier to monitor.

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    What if the content you buy is hosted in the cloud? In a tax free state or country? You just stream to local. :P

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    I'm against piracy. Most people know that. If this tax forces Steam to not sell to South Africans anymore then it means that the government is promoting piracy.

    The whole thing just makes me angry.

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    Assassin of Accountants Ike_009's Avatar
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    Quote Originally Posted by czc View Post
    I thought the VAT act prevented foreign companies from charging South Africans VAT.
    VAT is a tax on consumption so it depends on where the supply is consumed. That's why when you import goods, or in this case games, you are using the supply in SA and as such should be taxed.

    What your forgetting is VAT is a tax on the company but the consumer, SARS is just trying to get companies to enforce the consumer to pay the applicable tax
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    Thread Killer Mk VIII czc's Avatar
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    Quote Originally Posted by Ike_009 View Post
    VAT is a tax on consumption so it depends on where the supply is consumed. That's why when you import goods, or in this case games, you are using the supply in SA and as such should be taxed.

    What your forgetting is VAT is a tax on the company but the consumer, SARS is just trying to get companies to enforce the consumer to pay the applicable tax
    I would argue that nothing is being imported since nothing has been past customs.
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