Various concerns about the impact of the latest proposed amendments to the Value Added Tax (VAT) Act, which prescribe what qualifies as electronic services for VAT purposes, have been raised in Parliament and in submissions to legislators. The latest definition of electronic services is so wide that possibly every supply of services by way of "the internet, an electronic agent or electronic communication" could be caught in the net. Charles de Wet, head of indirect taxes at PwC, says there is also concern about the low threshold of R50,000 for foreign companies to register for VAT in SA. Local companies are required to register for VAT only when their taxable turnover exceeds R1m. The Davis tax committee says in its final report on VAT it sees no justification for the very low registration threshold (R50,000) applicable to suppliers of electronic services. E-services caught in the net De Wet says e-services that may now be caught in the rules if the proposed amendments are signed in...

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