After a period of public comment, the National Treasury has published its new regulations that aim to introduce South Africa’s 14% VAT on all digital goods and services, even those bought from foreign companies.

The commencement date of the regulations is set for 1 June 2014.

Treasury first published the draft regulations on its website towards the end of January 2014, giving interested parties until 20 February to comment on them.

The draft regulations stipulated a 1 April 2014 implementation date of the sales tax on digital goods and services.

Minister of Finance Pravin Gordhan published the actual regulations on Friday, 28 March 2014, in Government Gazette No. 37849.

In this document, the commencement date of the regulations are set for 1 June 2014.

The list below summarises digital goods and services which will be impacted, according to the regulation document:

Educational services

• distance teaching programmes;
• educational webcasts;
• internet-based courses;
• internet-based education programmes; or
• webinars.

Games and games of chance

• internet-based games, including any electronic game or multiplayer role-playing game;
• interactive games, such as games of chance, where the result is influenced by the skill of the player; and
• electronic betting or wagering.

Information system services

Internet-based auction service

Maintenance services

Which refers to technical support relating to

• blogs;
• databases;
• information systems;
• information system services; and
• websites.

Online content

• e-books, which means any digitised content of any book or electronic publication;
• films, which means any broadcast, documentary home-made video, live streaming performance, movie, music video, program, television series, or video
• images, which means any desktop theme, photographic image, pictorial image, or screensaver,
• music, which means any audio clip, broadcast jingle, live streaming performance, ringtone, song, or sound effect,
• software, including apps, system software, or plugins, and any update to these programs.

Subscription services

Any subscription service to:

• blogs;
• databases;
• information system services;
• journals;
• magazines;
• newspapers;
• games;
• social networking services;
• webcasts;
• websites;
• web applications; or
• web series.

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