Weekly tax updates 03-11-23

VAT Friday South Africa – Changes for South African foreign branches

The South African VAT Act was recently amended to alleviate the administrative difficulty for foreign entities to register for VAT in South Africa.

If one or more foreign entities forming part of the same “group of companies” are required to register for VAT, a single branch VAT registration for all those separate entities is now allowed.

One of the entities in the group must already have an enterprise in South Africa and be registered as a vendor.

The main registered vendor may then register a separate branch for all the foreign entities.

The main vendor must submit a VAT return to account for its own VAT and a separate VAT return for the branch to account for the VAT of all the other entities.

Certain conditions apply. For instance, the branch will be treated as an enterprise separate from the main registered vendor and Revenue may cancel the branch registration under specific circumstances. Any of the non-resident group companies may elect to register independently for VAT in South Africa, and not form part of the branch registration under the new dispensation.

For questions, please contact: [email protected]