1. VALUE-ADDED TAX SAIOM PRESENTATION THE IMPACT OF E-SERVICES UNDER THE DRAFT AND NEW REGULATIONS Carmen Moss-Holdstock Associate- Tax Department LLB, LLM (SA and International Taxation), MCOM (SA and International Taxation), PG Dip (Company Law) PG Certificate VAT, PG Certificate Income Tax, and PG Certificate CGT

2. SAOIM PRESENTATION  Alan Tait “VAT may be thought of as the Mata Hari of the tax world – many are tempted, many succumb, some tremble on the brink, while others leave only to return, eventually the attraction appears irresistible” Date of presentation Insert filename here 2

3. SAIOM PRESENTATION Topics for discussion  current position and difficulties in respect of e-services  VAT on e-services  Draft Regulations  New Regulations 7 October 2013 VAT on e-commerce 3

4. SAIOM PRESENTATION  VAT on imported services / reverse charge mechanism  the “enterprise” definition  lack of ‘place of supply’ rules and the need to even out the playing field Date of presentation Insert filename here 4

5. SAIOM PRESENTATION VAT ON E-SERVICES  limitations (collection / enforcement) in respect of VAT on imported services  international trend to impose VAT where the recipient of the services resides  foreign suppliers of electronic services required to register as vendors –  R 50,000 per annum turnover threshold (payment basis)  effective date 1 April 2014  regulation issued by Minister of Finance stating which type of services must register for e-services VAT Date of presentation Insert filename here 5

6. SAIOM PRESENTATION IMPACT OF E-SERVICES  Educational Institutions v Other related cloud services and data warehousing  14% increase in cost of electronically supplied services  university unable to claim input tax by virtue of making VAT exempt supplies under section 12 of the VAT Act  can the university still be held liable for VAT if foreign supplier refuses to register vs impact of Cloud services and other data warehousing or platform technology  VAT on imported services still remains as backstop  what about ‘educational services’ exemption in section 14?  Supply of Services Date of presentation Insert filename here 6

7. Thank you