South Africa VAT
Important: Information in this article does not constitute tax, legal, or other professional advice. If you have questions, please contact your tax, legal, or other professional advisor.
What is value added tax (VAT)?
In accordance with South African VAT legislation, WP Engine is required to charge value added tax (VAT) on all electronic services provided to customers residing in South Africa and remit them to the South African Revenue Service (SARS). VAT is levied at the standard rate of 15%.
Why is WP Engine collecting South African VAT?
Effective July 1, 2014, South African VAT legislation requires non-resident suppliers of electronic services to charge VAT on all electronic sales to South African residents. WP Engine recently became aware of this obligation and is working to come into compliance with the South African Revenue Service (SARS).
Consequently, effective February 1, 2019, WP Engine will charge VAT on all invoices with an address in South Africa on a prospective basis. Businesses residing in South Africa are highly encouraged to provide a VAT registration number. Invoices without a customer VAT registration number may prohibit a business from obtaining a refund of the related input tax. WP Engine is not responsible for disallowed refund amounts.
Does South Africa VAT apply to me?
Under South African VAT rules, WP Engine will calculate and collect VAT on sales to all customers with a South African address. Please note that the South African VAT Act makes no distinction between sales to businesses (B2B) and sales directly to consumers (B2C).
How do I obtain a South Africa VAT registration number?
Businesses must register with the South African Revenue Service (SARS) to obtain a VAT registration number. You can register online on the SARS website. Registering for South African VAT may lead to several associated compliance requirements.
How do I enter my South Africa VAT registration number into the User Portal?
To provide your South Africa VAT registration ID, login via the User Portal and click the “Update Contact Info” dropdown caret. Once here, enter your South African VAT registration number in the “VAT/GST ID” field and click Update.
How does WP Engine calculate the VAT amount for each sale?
If WP Engine determines that South Africa VAT should be collected, WP Engine will charge the South African VAT standard rate of 15%.
Will I be retroactively charged for VAT?
WP Engine will not retroactively charge customers VAT, but will charge VAT beginning February 1, 2019 on a prospective basis. VAT will be based on the invoice date.
Example 1
If an annual subscription renews and is invoiced on January 29, 2019, VAT will not be included on that invoice. However, the following annual renewal date of January 29, 2019 will include VAT.
Example 2
If an annual renewal date is May 1, 2019, the renewal invoice will include VAT for the May 1, 2019 – April 30, 2020 period, and no additional VAT will be added for the retroactive period of May 1, 2018 – April 30, 2019.
