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Value-added tax:Analysis of the supply of cross border electronic services
Developments in technology have created a global market place for consumers. Consumers have the option of purchasing goods in a physical store or an online store. Consumers are no longer limited to shopping at physical stores in their own jurisdiction and can shop online from the convenience o...
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| Format: | Thesis |
| Language: | English |
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Accounting and Accountability in Africa
2019
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| _version_ | 1867613419019960321 |
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| access_status_str | Open Access |
| author | Schutters, Clint Charles |
| author2 | West, Craig |
| author_browse | Schutters, Clint Charles West, Craig |
| author_facet | West, Craig Schutters, Clint Charles |
| author_sort | Schutters, Clint Charles |
| collection | Thesis |
| description | Developments in technology have created a global market place for consumers. Consumers
have the option of purchasing goods in a physical store or an online store. Consumers are no
longer limited to shopping at physical stores in their own jurisdiction and can shop online
from the convenience of their home. Consumers can acquire goods and services from any
country in the world. Online shopping provides consumers with a wide selection of goods
and services that may not be available in their own jurisdiction. Consumers favour
purchasing online since the goods and services acquired from foreign suppliers are usually
offered at better prices (price excludes VAT/GST). This creates an unfair advantage for
foreign suppliers over local suppliers.
The problem with selling a product to a consumer over the internet is that no physical
product crosses through any physical border post. These products are not physical goods
and are therefore referred to as services. Certain jurisdictions such as South Africa refer to
these services as electronic services. Electronic services are remotely supplied by foreign
suppliers to recipients resident in the Republic. Tax administrations lose revenue since there
are no border posts acting as agent to collect VAT/GST and remitting the VAT/GST to the
revenue authority. The foreign supplier would charge no VAT/GST on the supply and the
consumer will fail to self‐declare the VAT/GST to the revenue authority.
1 April 2014, National Treasury introduced electronic services which required foreign
suppliers of electronic services to register as vendors in the Republic. However, the
implementation was postponed to 1 June 2014 to allow foreign suppliers to update its
business systems. In 2015, further amendments were made to the electronic services
provisions. However, in 2015 the Davis Tax Committee issued the first interim report on VAT
to the Minister of Finance which highlighted concerns about the uncertainty and
inconsistency in the application of the electronic services provisions outlined in the
Regulations.
This study aims to analyse the supply of cross border electronic services in the Republic. Any
benefits and shortcomings will be assessed in a South African and international context. The
VAT Act is based on the New Zealand GST Act. The GST Act will be analysed to identify areas
of recommendation to improve the VAT Act, subject to the socio‐economic conditions in
South Africa. The BEPS Report and VAT/GST Guidelines will be analysed to identify how the
South African electronic services provisions have been adapted for a developing country
based on developed country principles. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/29826 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:35:50.695Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2019 |
| publishDateRange | 2019 |
| publishDateSort | 2019 |
| publisher | Accounting and Accountability in Africa |
| publisherStr | Accounting and Accountability in Africa |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/29826 Value-added tax:Analysis of the supply of cross border electronic services Schutters, Clint Charles West, Craig Taxation Developments in technology have created a global market place for consumers. Consumers have the option of purchasing goods in a physical store or an online store. Consumers are no longer limited to shopping at physical stores in their own jurisdiction and can shop online from the convenience of their home. Consumers can acquire goods and services from any country in the world. Online shopping provides consumers with a wide selection of goods and services that may not be available in their own jurisdiction. Consumers favour purchasing online since the goods and services acquired from foreign suppliers are usually offered at better prices (price excludes VAT/GST). This creates an unfair advantage for foreign suppliers over local suppliers. The problem with selling a product to a consumer over the internet is that no physical product crosses through any physical border post. These products are not physical goods and are therefore referred to as services. Certain jurisdictions such as South Africa refer to these services as electronic services. Electronic services are remotely supplied by foreign suppliers to recipients resident in the Republic. Tax administrations lose revenue since there are no border posts acting as agent to collect VAT/GST and remitting the VAT/GST to the revenue authority. The foreign supplier would charge no VAT/GST on the supply and the consumer will fail to self‐declare the VAT/GST to the revenue authority. 1 April 2014, National Treasury introduced electronic services which required foreign suppliers of electronic services to register as vendors in the Republic. However, the implementation was postponed to 1 June 2014 to allow foreign suppliers to update its business systems. In 2015, further amendments were made to the electronic services provisions. However, in 2015 the Davis Tax Committee issued the first interim report on VAT to the Minister of Finance which highlighted concerns about the uncertainty and inconsistency in the application of the electronic services provisions outlined in the Regulations. This study aims to analyse the supply of cross border electronic services in the Republic. Any benefits and shortcomings will be assessed in a South African and international context. The VAT Act is based on the New Zealand GST Act. The GST Act will be analysed to identify areas of recommendation to improve the VAT Act, subject to the socio‐economic conditions in South Africa. The BEPS Report and VAT/GST Guidelines will be analysed to identify how the South African electronic services provisions have been adapted for a developing country based on developed country principles. 2019-02-27T13:04:19Z 2019-02-27T13:04:19Z 2018 2019-02-27T13:02:52Z Master Thesis Masters http://hdl.handle.net/11427/29826 eng application/pdf Accounting and Accountability in Africa Faculty of Commerce University of Cape Town |
| spellingShingle | Taxation Schutters, Clint Charles Value-added tax:Analysis of the supply of cross border electronic services |
| thesis_degree_str | Master's |
| title | Value-added tax:Analysis of the supply of cross border electronic services |
| title_full | Value-added tax:Analysis of the supply of cross border electronic services |
| title_fullStr | Value-added tax:Analysis of the supply of cross border electronic services |
| title_full_unstemmed | Value-added tax:Analysis of the supply of cross border electronic services |
| title_short | Value-added tax:Analysis of the supply of cross border electronic services |
| title_sort | value added tax analysis of the supply of cross border electronic services |
| topic | Taxation |
| url | http://hdl.handle.net/11427/29826 |
| work_keys_str_mv | AT schuttersclintcharles valueaddedtaxanalysisofthesupplyofcrossborderelectronicservices |