No matter where you reside or where your online business is predicated ó if you've got customers in South Africa , you gotta follow South African VAT rules. Thatís what this guide is for! This guide includes everything you would like to understand about digital tax laws in South Africa , whether your customers sleep in Pretoria or Cape Town .
Digital products
First letís confirm what youíre trying to sell in South Africa . Are you selling digital products?

A digital product is any product thatís stored, delivered, and utilized in an electronic format. These are goods or services that the customer receives via email, by downloading them from the web , or through logging into an internet site .

Youíre probably consuming and using digital products all day long, whether or not you know it . Here are some common ones on the market today:

E-books, images, movies, and videos, whether buying a replica from Shopify or employing a service like Netflix. In tax language, these products are during a category usually called, ďAudio, visual, or audio-visual products.Ē
Downloadable and streaming music, whether buying an MP3 or employing a service like SoundCloud or Spotify. Of course, these products also fall within the audio category.
Cloud-based software and as-a-Service products, like Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).
Websites, site hosting services, and internet service providers.
Online ads and affiliate marketing. Income from these services are often considered taxable under digital tax policies.
Heads up: you would possibly also hear digital goods mentioned as ďdigital services,Ē ďe-goodsĒ, or ďe-services.Ē All of those terms ask an equivalent thing.
South Africa's VAT for digital products
VAT is that the consumption tax throughout South Africa , levied on almost everything sold within the country. There are specific rules around digital products, which you want to follow closely to remain tax compliant.

So if you sell digital products to a customer in South Africa , you want to charge the VAT rate. Simple, right?

Itís simple in theory. But in practice, South Africa VAT features a bit more complexity. You donít necessarily got to add tax to each sale. It can depend upon the quantity of sales you create within the country, whether the sale is B2B or B2C, and other things. Weíll enter more detail about each of those throughout the remainder of the guide!
Registering for South Africa's VAT
Is there a sales registration threshold?
Yes, South Africa has an annual sales registration threshold of ZAR 1,000,000, supported local sales.

What does this mean exactly?

Well, the edge amount refers to your total sales within the country, during any 12-month period. this will be a calculation of sales within the last twelve months, or a prediction of sales within the next twelve months ó any rolling year-long period, past or future.

If your total sales in South Africa remains below ZAR 1,000,000, then you donít got to worry about VAT in the least . Phew!

But once your local sales do surpass ZAR 1,000,000, then you'll need to register for VAT and suits all of the South African rules around rate and collection, invoices, and filing returns. Please contact South Africa's tax agency for more information.
The registration process
So, seems you are doing got to register for tax in South Africa . Donít worry! Just follow these instructions from the South African tax authority on the way to register for South African VAT.

Ultimately, you'll receive a VAT license number , which establishes you within the South Africa legal system as a legal business. This number tracks your business through the system: the taxes you pay, the tax credits you receive, plus the tax you charge from customers.
Do you need an area tax representative?
No, you donít need a representative to handle your taxes in South Africa . That is, you arenít required to possess one. Some tentative foreign business owners may hire a tax representative for peace of mind. Taxes are often an intimidating and confusing topic, especially during a foreign language! Makes absolute sense.

But because the South African tax portal is out there online, itís possible for you to handle these foreign taxes on your own. Itís just up to you!
Collecting VAT in South Africa
Once youíre registered for taxes, youíre expected to charge 15% VAT on every sale to a South African resident.
VAT invoices in South Africa
In order to suits tax laws, you ought to include the subsequent information on your invoices to customers in South Africa:

Your businessí name and address
Your businessí VAT number
Invoice date
Invoice sequencing number
Buyerís name and address
Buyerís VAT number.
VAT (amount and rate) applied to every item
Final amount after VAT is added
The currency used
The easiest solution for the VAT invoice would be to use a tax software that automatically generates and sends all invoices (as soon because the sale is complete), and also stores them within the cloud for you. Quaderno does just that, but we wonít continue about it here.
Filing VAT returns
Charging and collecting tax is merely the primary half staying compliant. The second, and equally important, half is filing returns and paying whatever you would possibly owe to the govt .

In South Africa , foreign businesses are expected to file tax returns monthly . you've got days to file and pay after the top of every period.